William Hill Insulted by Rank, 888 Takeover Offer

Last month, we discussed how 888 and Rank have partnered up in a takeover bid for William Hill. This week, 888 and Rank made a £3.16 billion offer for the UK bookmaker, which was promptly rejected.

William Hill seemed insulted at the unsolicited offer, saying that it “substantially undervalues” the company.

Gareth Davis, CEO of William Hill, added that accepting such an offer would be a risky move for their shareholders.

“In addition, as we have said before, this proposal is highly opportunistic, complex and poses significant risk for our shareholders,” Davis said.

888 and Rank of course disagree, labeling the proposal “a compelling value creation opportunity for William Hill and its shareholders.”

Rank, an online casino and bingo hall operator, and 888, a network of online casinos, want to add William Hill to their portfolio to create the UK’s largest multi-channel gambling operator.

According to the BBC, the companies believe that the merger will save them a combined £100 million. Furthermore, the merger would create the UK’s third-biggest online betting group since the three companies earn a combined £2.7 billion.

William Hill isn’t on board with the takeover, though, calling the first offer “a highly complicated three-way combination at a very low .”

A company statement added that there’s “substantial risk for William Hill shareholders in the achievement of the estimated future cost synergies, which are only expected to be achieved in full by the end of 2020.”

If William Hill ever agrees to the deal, it would require 888 overtaking Rank, then the combined company buying William Hill through financing.

Rank and 888 are worth a combined £1.7 billion, just over half of what they offered for William Hill.

William Hill may be more reluctant to sell after revenues rose 1% in the first half of the year. The company said that heavy betting on the 2016 Euro football tournament more than covered up for poor online betting performance amid “the worst Cheltenham results in recent history.”

Even with William Hill experiencing more success, it doesn’t look like 888 and Rank are ready to give up pursuit. The companies have argued that the merger would increase William Hill’s to £3.6 billion, thanks to savings and increased stock prices.

If all three sides complete a deal this year, it would be the third recent mega-deal in the UK online casino industry. Ladbrokes and Coral made a £2.3bn merger in July, while Paddy Power and Betfair linked up in September 2015.