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aug
15

William Hill rejects £3bn takeover bid by 888 and Rank

Tags: 888, Rank Group, William Hill.
Posted on Monday, August 15, 2016 by "T".

William Hill rejects the joint takeover proposed by 888 and Rank Group, labeling it "opportunistic". Earlier last week, the board of William Hill (considered as one of the biggest bookmakers in Britain) has unanimously rejected the £3.16 billion ($4.2 bn) takeover bid from online operator 888 Holdings and casino giant Rank Group.

The offer, in cash and shares, was labeled "highly opportunistic" by the chairman of William Hill Gareth Davis, who explained that the offer did not reflect the true value of the company, "This conditional proposal substantially undervalues William Hill, is highly opportunistic and does not reflect the inherent value of the business. It is a very complex three-way combination at a low premium involving substantial risk for William Hill shareholders: execution risk, integration risk and risks of materially increased leverage."

What would happen if they agreed
The deal would potentially create the UK's third-biggest online betting group with revenues reaching up to £2.7bn. The shares of William Hill have risen 22% to 334p since 888 Holdings said last July that it was considering a joint bid with Rank Group. The bid means 888 will take over Rank, with the newly formed company then buying William Hill.

The outcome would involve some £2.2bn in debt, chairman Davis pointed out.

The offer of 364p per share to William Hill shareholders consists of 199p in cash and 0.725% per share in the new company, BidCo. However, 888 and Rank argue that its business plan will increase the value of the company to up to 408p per share - or £3.6bn. Both 888 and Rank stated that they see a "significant industrial logic in the combination, through consolidation of their complementary online and land-based operations, delivery of substantial revenue and cost synergies, and from the anticipated benefits of economies of scale which will accrue to all shareholders."

888 co-founder's son irked by William Hill's rejection
On the other side, the rejection was not taken too well by Eyal Shaked, the son of 888 Holdings co-founder Avi Shaked, who stated in his Twitter feed that the rejection will result in William Hill's downfall.

Even though Eyal does not own any of his family's stake in 888 Holdings, his family controls about 48% of 888; therefore, its support for the bid on William Hill is crucial. It is rumored that it was the Shaked family who rejected William Hill's takeover bid of 888 back in February 2015. William Hill put up a £700m offer.


Source: http://www.telegraph.co.uk/business/2016/08/09/rank-and-888-make-36bn-bid-for-william-hill/

 

 


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13 comments for "William Hill rejects £3bn takeover bid by 888 and Rank"

 doubletop7778/15/2016 9:17:22 AM GMT
The amount of money being talked about here seems insane to me. It goes to show that there is still a lot of money to be made in bookmaking. It will be interesting to see how this plays out
 damosk8/15/2016 9:23:50 AM GMT
Big money breeds big money. It's always interesting when competitors attempt to take over others . William hill is clearly not having any of it and have sent the joint bidder off with a flea in their ear. I don't suppose this is the last we will hear about this so keep your eyes peeled to see the next instalment .
 DaCapo718/15/2016 12:28:14 PM GMT
Yes, it was really intersting to see, what a big bookmaker do in this case. We see, not everything is possible and every bookmaker have a own limit for their operatings. Now we can wait for the next interesting step Blink
 shokaku8/15/2016 1:12:16 PM GMT
One could expect the concentration in the gambling industry to continue, with further mergers. But this one would come a bit surprisingly. These would be two top dogs joining forces, surely forcing others to follow that path.
 pinotte8/15/2016 8:15:09 PM GMT
There is a to many online gambling site of any kind. Then the offer is coming to be bigger than the demand.

So in this situation there is only one way to go which is consolidations or many of them will just loose money and go bankrupt.

One day this deal will go and they will be in very good position against the competition. Smile
 pochui8/15/2016 8:18:29 PM GMT
quite a complex deal- one company taking over another company and forming a new company which is formed with the sole intention of taking over another company... oh and some (not a very small) amount of what is offered is going to be financed by giving away shares of this newly formed company... complex and kinda fishy...
 bowie19848/15/2016 11:37:37 PM GMT
Posted by shokaku:
One could expect the concentration in the gambling industry to continue, with further mergers. But this one would come a bit surprisingly. These would be two top dogs joining forces, surely forcing others to follow that path.

Something not right here.
If both of are them having healty returns on their shares why do they need this?
And if all of this will result in a hostile takeover then I doubt any of the big two will win with it at the end.
 Mober8/16/2016 4:11:40 PM GMT
On big offer here. Huge i must say.
That shows in what level some of the sites are in online world.
I dont know about their goal here, no cluw who the second buyer is,
but probably 888poker wants to go into the the "retail shops" business.
There is still good money there.
 bowie19848/16/2016 11:48:21 PM GMT
Yeah, by all means I kinda like the WillHill website but they really not industry leaders when it comes to online stuff. They are 'just' followers there.
The huge dough is in their UK retail network, but that alone deinitely not worth this much money.
 Calmplay8/20/2016 5:56:01 AM GMT
William Hill is one of the biggest figure in the gambling industry so there is no reason to sell or share holdings or whatever as they are so powerful on the market along with bet365 IMO...
 dule-vu8/20/2016 12:02:56 PM GMT
such a big offer means that they worth a lot on market,so why to sell their business!that is lot of money,but now they have more reason not to sell and to try to be better and to take more players on their site!
 Tony_MON7ANA8/20/2016 2:56:49 PM GMT
It is somewhat ironic that it was the Shaked family, 888 Holdings co-founder, who rejected William Hill's takeover bid of 888 back in early 2015.
Let's see if there will be any direct and measurable effect on stock price of both companies.
 bowie19848/21/2016 12:06:03 AM GMT
Posted by Tony_MON7ANA:
It is somewhat ironic that it was the Shaked family, 888 Holdings co-founder, who rejected William Hill's takeover bid of 888 back in early 2015.
Let's see if there will be any direct and measurable effect on stock price of both companies.

Dunno, it seems to me this thing is really getting on personal levels for both sides and they should have avoid it 'cuz that is like business 101 of how not to operate something.

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