Online casino operator 888 has seen its share price jump by 18% after it revealed that William Hill has been considering making a move for the company. Shares in 888 rose 26.5 pence to 171.5 pence at the close of trading in London, valuing the company at about £608m.
In a regulatory announcement, 888 told the stock market: “The Board of the Company notes the recent press speculation concerning the possibility of an offer being made for the Company. The Board of the Company confirms that it received an approach regarding a possible offer for the Company by William Hill PLC. There can be no certainty, however, that any firm offer will be made nor as to the terms on which any firm offer might be forthcoming.”
It added that the company’s shareholders will be kept informed of ‘relevant developments’ and a further announcement will be made as appropriate.
It has been suggested that William Hill has reached a preliminary deal with 888 for 210p per share, which values 888 at £744.3m – a considerable premium for 888 shareholders. However other reports have suggested that an important shareholder wants 300p a share – more than double the value before the potential deal came to light.
Only last month William Hill CEO James Henderson was hinting that the company was in the mood for a large acquisition. “It gives me flexibility,” Henderson admitted when pressed about the firm’s healthy balance sheet. “You know the three strands of the strategy: we are looking at technology, international diversification and omni-channels. Anything that can accelerate that, we would look at.”
Meanwhile 888 Holdings has forever been the bridesmaid during the various waves of industry consolidation and has even been left at the altar before now after several flirtations with Ladbrokes. In contrast, William Hill has a track record of decisive acquisitions.