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888 Holdings and Rank Group with a Bid Proposal for William Hill
- July 25, 2016 By Oliver Young -
William Hill is one of the largest and most popular betting and casino operators in the UK. Last year, it was reported that William Hill unsuccessfully tried to acquire rivalling 888 in a £750 million bid. Now, it seems that the tables have turned, as William Hill is now the subject of an attempted acquisition. It has been announced that 888 Holdings and Rank Group are set to launch a joint bid for William Hill, which, if successful, will give birth to a tremendously large betting and casino gaming company worth £3 billion.
That this is no speculation was confirmed by the two companies in a joint statement. They clearly stated their intentions, but it was also noted that it is not guaranteed that there will be an offer. This comes after William Hill sacked its chief executive, Henderson. The betting and casino market has seen its fair share of mergers and acquisitions, but if this deal goes through it will definitely be one of the biggest changes on the market.
The Planned Merger Will Be of Benefit of All Shareholders
Apparently, there is economic logic behind mergers. Paddy Power and Betfair already formed a merger and it is expected for Gala Coral and Ladbrokes to do the same. If 888 and Rank manage to acquire William Hill there will be a lot fewer big players on the UK betting market.
When William Hill attempted to buy 888 it was claimed that the owners expected a better offer. Now, we don’t know yet at what price will William Hill’s shares sell, but it is more than clear that the two new partners are prepared to do everything within their power for the bid to be successful. It was stated that by working together and unifying their “complementary online and land-based operations” will bring in greater revenues and it turn would be quite beneficial for all shareholders.
It seems that the companies would firstly merge before making an offer for William Hill, even though some have stated that 888 might try to acquire William Hill even prior to the merger with Rank Group.
William Hill Will Probably Reject the Bid
However, other sources claim that the deal is very likely to go through, as William Hill made it quite clear, regardless of the situation with the chief executive that the company is ready to make the necessary changes in order to improve its revenues and profits and that major shareholders have no intentions of selling their shares.
People who know the situation at William Hill argue that the proposal is seen as too premature risky. Moreover, we know that William Hill has already made few acquisitions after it failed to buy 888 last year.
Gareth Davis, William Hill’s chairman admitted that the company has certain problems when it comes to online betting and gaming revenues, as the company has a very slow online growth. The price of William Hill’s shares decreased more than 30% in the last 12 months and now the value of the company is lower than £3 billion, whereas 888’s share price grew by almost 30%.
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