It was announced that the gaming consortium, consisting of 888 and Rank Group has submitted a bid for the acquisition of the gaming giant William Hill. According to reliable sources, the value of the proposal was set at 408p per share and the bid price amounts to £3.6 billion.
If the plans for a tie-up between William Hill, Rank Group and 888 are materialized, the end result will be a gaming company, generating revenues of more than £2.5 billion per year and posting earnings of at least £500 million. In other words, the joint efforts of the three companies are likely to lead to the establishment of the third largest online betting company in terms of revenues.
Representatives of the three companies were reluctant to share more information about the bid and remained tight-lipped as to what their further actions would be.
Last month, representatives of 888 announced that company’s officials were considering the option of submitting a bid for William Hill’s takeover. People familiar with the matter did not miss to remind that last year William Hill made an unsuccessful attempt to acquire 888 for the amount of £700 million. The deal was not inked as the 888 owners considered the proposed price too low.
The main reason why 888 and Rank are interested in acquiring William Hill is that they are willing to minimize the costs they would otherwise spend on taxes and license fee applications.
As for William Hill, it is also likely to benefit from the eventual merger as it will gain access to the online platform of 888 and take advantage of the innovative technologies the operator is popular for.
It is also worthy of mentioning that William Hill will benefit from the merger in terms of geography. Despite being popular on a global scale, as much as 85% of William Hill’s revenue is generated in the United Kingdom. On the other hand, 888 is not primarily focused on the UK market and half of its revenue comes from players based outside the UK.
After the pending Betfair-Coral merger, the formal bid submission is the latest major change the gambling industry might have to adjust to. It is the expected result caused by the increased tax rates, intensified competition and the clampdown on the fixed-odds betting terminals.
