William Hill turns down revised deal from Rank and 888

15 August 2016

Bookmaker William Hill has actually rejected a revised takeover method from 888 and Rank, stating it still "substantially" undervalues the company.

William Hill said the yohaig code brand-new proposition provided its investors an estimated worth of 352p a share, compared to a previous deal of 339p a share.

Rank and 888 reaffirmed their view that the offer was "an engaging value creation opportunity for William Hill".

But William Hill said the modified offer was "highly opportunistic".

"The board continues to see no merit in engaging with the consortium," the company added.

The modified takeover proposal would see William Hill investors receive 199p in cash and 0.86 of shares in BidCo - the business being formed by 888 and Rank to buy William Hill - for each share they own.

William Hill investors would end up with 48.8% of the combined group.

Under the previous method, William Hill investors were used 199p in money and 0.725 BidCo shares, leaving financiers with 44.6% of the combined group.

'Substantial threat'

"this promotion code revised proposition continues to considerably underestimate the business and the yohaig code cash element of the proposition has not changed. Therefore, the board sees no merit in interesting," stated William Hill's chairman, Gareth Davis.

"As we have said before, this promotion code is highly opportunistic and intricate and does not enhance the tactical positioning of William Hill.

"The board continues to think we have a strong group to provide remarkable worth to our investors and trading at the start of the second half offers us restored confidence in our stand-alone technique."

Casino and bingo hall operator Rank and online gambling group 888 said that the proposed new combination would develop the UK's largest multi-channel gambling operator by earnings and earnings.

They also said it would lead to expense savings of at least ₤ 100m a year, while more savings could potentially be discovered "through constructive engagement".

However, William Hill has stated the cost savings will not be accomplished completely until completion of 2020 and present "considerable threat for William Hill investors".

The president of 888, Itai Frieberger, said a combined business might "lead development in the sector", while Rank president Henry Birch said the deal made "compelling tactical sense for all 3 services".

The UK's 2nd and third-largest retail bookies, Ladbrokes and Gala Coral, are currently continuing with their ₤ 2.3 bn merger, which will see them leapfrog over William Hill to become the nation's biggest company in the sector.

The Competition and Markets Authority has told the 2 firms that they should sell 350 to 400 shops in order for the merger to be cleared.

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