William Hill says NO to Rank-888 revised offer

A morning of high industry M&A drama has seen William Hill’s board reject the revised consortium takeover offer put forward by Rank Group and 888 Holdings.

The new offer presented to William Hill governance on Sunday would see 888 act as the acquiring entity for the ‘BidCo’ consortium. William Hill investors would be offered 199 pence in cash and 0.860 BidCo shares per existing share.

The offer would see William Hill Shareholders own 48.8% of the combined group, with William Hill governance estimating a revised value of 352p per share attached to its new bid.

As with the previous rejected offer, William Hill governance stated that Rank-888 had ‘undervalued’ the company, reiterating that it ‘saw no merit’ in pushing the takeover offer to its investors.

William Hill Chairman Gareth Davis would comment on the offer “This revised proposal continues to substantially undervalue the company and the cash element of the proposal has not changed. Therefore, the board sees no merit in engaging. As we have said before, this is highly opportunistic and complex and does not enhance the strategic positioning of William Hill. The board continues to believe we have a strong team to deliver superior value to our shareholders and trading at the start of the second half gives us renewed confidence in our stand-alone strategy,”

Rank and 888 released joint statements this morning, specifying details of the proposals put forward to William Hill. The consortium pair declared that it estimated the offer at a value of 394p per share based on the closing price of 888 shares on August 5 (date of original consortium offer).

Stating its intent to begin negotiations, Rank/888 declared that William Hill shareholders would benefit from a substantial cash return, an additional 30p premium on its original offer and the largest equity within the new business which would seek to become the UK’s leading ‘multi-channel’ gambling operator.

The consortium party, stated that the offer had been approved by 888’s main shareholder trust and Rank Group investors.

“We are extremely excited by the prospect of creating a dynamic, broad-based, multi-channel gambling business of real scale. We expect the combined business to lead innovation in the sector, drive growth and deliver superior returns for all shareholders,” 888’s Chief Executive Itai Frieberger said.

“With a 48.8% share in the combined business, the largest proportion of the benefits would accrue to William Hill shareholders (as well a significant cash payment), and we hope to engage the William Hill board in constructive discussions to deliver a deal that makes compelling strategic sense for all three businesses,” Rank’s CEO Henry Birch added.