William Hill Rejects Rank and 888 Joint Bid
The much talked about joint bid from Rank and 888 to acquire William Hill for £3.2 billion has been unanimously rejected by its board. William Hill were not impressed with that offer and said that it “substantially” undervalued William Hill’s value. In addition they went on to say that it was to complex which in other words means that they are looking for a higher price.
Rank and 888 put in cash and stock bid for William Hill that valued them at 364p a share in a deal that would see them creating a new company BidCo that would acquire William Hill. Despite the management troubles at William Hill Chairman Gareth Davies did not mince his words as to his thoughts on the deal. He said,” 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.”
Analysts believe that an offer of around 400p a share would be likely accepted by William Hill shareholders. For their part Rank and 888 believe that the three way partnership would have significant cost savings for all the companies. They also believe it takes William Hill to another scale especially in terms of online gambling in which William Hill have by their own admission underperformed.