The last few days were quite eventful for the Rank Group and 888 Holdings consortium. The duo sent a formal bid for the acquisition of their rival William Hill, but the £3.6 billion offer was rejected a few hours later and defined as low and even ill-conceived.
However, the dismissal did not prevent 888 and Rank from seeking a merger. Despite William Hill’s rejection, 888 and Rank Group released a statement claiming that their proposal was an excellent opportunity for the further growth of the UK gaming giant.
It was also said in the statement that the three-way deal would change the reality of the gambling industry on a global scale and the enlarged company would be the largest multichannel operator on the territory of the United Kingdom. They urged William Hill officials to consider negotiating a merger and emphasized on the benefits it would bring.
The merger between the three companies is expected to increase the marketing effectiveness, ensure lower costs as well as an introduction of companies’ products on new markets. Last but not least, the merger would be the solution against the intensified competition and the increasing taxes. The net annual profit is said to go over £100 million.
According to 888 and Rank Group officials, once the merged company is included in the list of the 100 largest companies at FTSE, a rapid development can be anticipated in the next two years.
Last year William Hill proposed an offer of £700 million for the acquisition of 888, but it was disapproved by 888 owners. William Hill officials also rejected the bid sent by 888 and Rank Group on Tuesday and justified their decision with the fact that they did not consider the merger to be an effective tool for enhancing the current digital strategy. In addition, they expressed their concerns about the £2.2 billion of gearing they need to prepare should they consider the opportunity for a merger.
William Hill’s Chief Executive James Henderson is no longer a part of the company, so 888 and Rank proposed Itai Frieberger for a CEO of Digital Operations of the enlarged group. Henry Birch, the Rank Group CEO, was to be appointed as CEO of the company.
Mr. Frieberger, 888 CEO, urged William Hill board of directors to see the great opportunities for development in the online, retail and international segments. Mr. Birch remained hopeful that talks with William Hill board will be held, but remained tight-lipped as to whether they would submit a second bid.
Nevertheless, William Hill representatives announced mere minutes ago that the company still considers the proposal “highly opportunistic”, which makes the chances of entering into talks with 888 and Rank Group pretty slim.
