After Casino News Daily reported on Sunday that major gambling operators The Rank Group and 888 Holdings are mulling a £2-billion tie-up, the two companies confirmed in a joint statement that consolidation talks are indeed taking place. In addition, the operators are considering the opportunity to make a bid for fellow gambling company William Hill.
If the three-way deal is eventually completed, it will result in the creation of a £5-billion gambling powerhouse with presence in multiple jurisdictions and operations in all market verticals. The Rank Group owns UK’s largest chain of land-based casinos as well as a chain of bingo halls around the country. 888 Holdings is currently one of the major players on the online gambling scene. As for William Hill, it is still officially the owner of UK’s largest chain of High Street betting shops and will be holding its title up until the Ladbrokes/Coral merger is completed.
Commenting on the latest announcement, 888 Holdings and The Rank Group said in a joint statement that their combination seems to be a logical move as it will lead to “consolidation of their complementary online and land-based operations” and delivery of considerable revenue and cost synergies.
Yet, the two gambling operators pointed out that they have not officially approached William Hill with an offer but have informed its board that there was interest in acquiring the company. It was only last Thursday when it was announced that William Hill CEO James Henderson was leaving his post after two years at the operator’s helm.
Although the major gambling company was among the first to implement innovative online sports betting offering, its digital business has not been doing very well recently. William Hill issued a profit warning in March, saying that full-year profit would probably be lower than originally expected mainly due to poorer online performance.
Shares in the company had dropped 31% in the twelve-month period before Mr. Henderson’s departure, hitting their three-year lowest in June. Currently, the operator is valued at about £2.75 billion. A spokesperson refused to dwell upon the matter but said that a statement will be released on Monday.
With the implementation of higher gambling taxes and stricter regulations, and the constantly growing competition, operators are looking for ways to offset related costs and consolidation with fellow industry players seems to be among the most preferred such ways. Over the past year, three pairs of major gambling operators announced multi-billion merger and acquisition deals that have changed the global gambling landscape for good.
According to people with knowledge of the matter, William Hill might express interest in the proposed three-way deal, although The Rank Group and 888 Holdings said in their joint statement that an official bid may not be made at all and if made, may not result in a deal being completed.
Last year, William Hill proposed to acquire 888 Holdings for the amount of £700 million but the offer was rejected as owners of the online gambling group considered it too low.
