William Hill turns down Rank and 888's ₤ 3.16 bn bid

Bookmaker William Hill has actually declined a ₤ 3.16 bn takeover deal from online operator 888 and casino giant Rank.

The bid, in shares and cash, was called "extremely opportunistic" by Gareth Davis, chairman of William Hill, who stated it did not show its real worth.

The bet9ja's welcome offer would produce the UK's third-largest online betting group with profits of ₤ 2.7 bn.

William Hill shares have increased 22% to 334p because 888 stated last month that it was considering a joint quote with Rank.

The bid would indicate 888 taking over Rank, with the freshly formed company then buying William Hill.

Mr Davis said that it would involve some ₤ 2.2 bn in financial obligation. He said: "It is a really complex three-way combination at a low premium including considerable threat for William Hill shareholders: execution danger, combination threat and threats of materially increased take advantage of."

But Rank and 888 argue that its business plan would increase the business's worth to as much as 408p a share - or ₤ 3.6 bn.

888 and Rank stated that they see "significant commercial logic in the combination, through combination of their complementary online and land-based operations, shipment of considerable revenue and expense synergies, and from the awaited benefits of economies of scale which will accrue to all investors."

Turnaround

William Hill stated that it was already seeing a turnaround in its own online service, and while a merger would give it access to 888's overseas markets it replied that it was already seeing development of 12% in its Australia operation and 49% in operating earnings in the US.

William Hill tried and failed to obtain 888 in a ₤ 700m deal last year.

John Colley, a Professor of Practice at Warwick Business School said the yohaig code quote "looks especially opportunist as William Hill have lost their president James Henderson after two years of frustrating performance with the shares at a lowly 336p compared with the 364p deal.

"However William Hill is now in play and others might be together with enhanced offers and more money.

"The market is combining quickly and William Hill, Rank and 888 will belong to that one method or another. For this promotion code factor, Rank and 888 needs to likewise see out."

Other mergers in the industry consist of Ladbrokes and Coral signing a ₤ 2.3 bn merger in July and Paddy Power and Betfair signing up with forces in September.

William Hill shares struck by revenue alert

23 March 2016