Rank & 888 consortium make appeal to William Hill investors for direct talks

Following the rejection of its £3.3 billion takeover offer by the William Hill board, on the grounds that its proposed bid ‘substantially undervalued’ its business. The Rank Group and 888 Holdings consortium have called for direct talks with William Hill governance, outlining the case for its three-way merger.

Seeking to appeal to William Hill investors, Rank and 888 have today published details of its joint-bid which specified that a three-way enterprise would generate combined synergy savings of circa £100 million.

Further stating its intent, the consortium claims that the new FTSE business would create the

“UK’s largest multi-channel gambling operator by revenue and profit”, with 92% of its revenues generated from regulated markets.

Citing recent mass industry consolidation, the consortium further details that struggling William Hill will likely lose further market share to newly merged enterprises of Ladbrokes-Coral and Paddy Power Betfair.  

Under its proposed terms, William Hill’s shareholders would hold 44.7 percent of the combined group, 888’s 25.7 percent and Rank’s 29.6 percent.

On Tuesday afternoon, William Hill governance quickly turned down the £3.3 billion consortium approach stating that the deal was fraught with risks concerning a tricky three-way merger of assets and concerns regarding leveraged debt on the business.  William Hill governance refused to put forward the deal proposal to its investors for review.

Declining the consortium offer William Hill’s Chairman Gareth Davis reiterated his opposition: 

“The board continues to see no merit in engaging on the basis of a proposal that substantially undervalues the group. In addition, as we have said before this proposal is highly opportunistic, complex and poses significant risk for our shareholders.”

Rank Group CEO Henry Birch and his consortium counterpart Itai Frieberger, CEO of 888 Holdings have stated that they want to engage in direct ‘friendly’ talks with William Hill. Both leaders are adamant that in the changing market conditions facing UK betting operators, a merger proposal to form the leading  FTSE-100 gambling enterprise should be reviewed by William Hill in the interest of its investors.