Gambling companies the Rank Group and 888 Holdings announced on Thursday that they will no longer pursue a merger with William Hill, after their bigger rival rejected two takeover bids over the past several weeks.
Late in July, the Rank Group and 888 Holdings confirmed plans for a £3-billion-plus mega merger with William Hill, a move that would have resulted in the creation UK’s largest operator in terms of profits and revenue generated and one of the world’s gambling powerhouses with presence in multiple regulated markets and across multiple channels.
Over the past several weeks, the two gambling companies reached William Hill with two offers. Under the original bid, one of UK’s leading bookmakers was valued at 339 pence per share. After the first offer was rejected, the Rank Group and 888 Holdings sweetened their proposal, valuing their bigger rival at 352 pence per share. Earlier this week, William Hill rejected that second bid, too, arguing that it had substantially undervalued the gambling operator.
Although people with knowledge of the matter believed that the two bidders would do their best to make their offer attractive enough, Rank Group and 888 Holdings decided to eventually walk out of the proposed mega merger.
The two companies said in a joint statement on Thursday that they had failed to engage meaningfully with William Hill’s Board. Itai Frieberger, CEO of 888 Holdings, pointed out that they were disappointed that their bigger rival did not share their vision for the combination of their businesses, a move that would have resulted in “scale, diversification, and strong revenue and cost synergies,” according to the official.
Rank Group CEO Henry Birch added that the deal would have delivered substantial value for all involved shareholders. The two gambling groups pointed out that they could have created a gambling powerhouse that would have changed not only the UK gambling landscape but also the global one.
Following the news that a consolidation will no longer be pursued, William Hill said in a statement that it will continue focusing its efforts on delivering value for shareholders by diversifying offering both digitally and internationally.
It is still unclear whether the Rank Group and 888 Holdings would engage into a merger without William Hill but the chances for such a move seem minuscule as the acquisition of their bigger rival has been the main driving force of their consolidation efforts.
