Hills refuses to negotiate with 888/Rank
Operator says it will not engage with consortium looking to create UK's largest multi-channel gambling operator
William Hill says it will not be engaging with 888 Holdings and The Rank Group any further after the consortium yesterday outlined its rationale for a deal it believes will create a “transformational force” in the online gambling sector.
In a joint-statement released 24-hours after William Hill’s initial rejection of the £3.6bn proposal, 888 and Rank said the combined entity would lead to at least £100m in cost synergies and substantial additional revenue opportunities.
The consortium noted the “non-engagement” by Hills and said it would “welcome the opportunity” to discuss the potential deal with the Hills’ board in order to discuss what it viewed as a “compelling value creation opportunity” for the bookmaker and its shareholders.
However, William Hill last night reiterated its stance set out earlier in the week, said the consortium’s statement yesterday offered no further detail and that the board had no plans to discuss the proposals with the consortium.
Gareth Davis, chairman of William Hill, said: “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.”
Cost synergies highlighted by 888 and Rank included a reduction in third-party fees, an integration of digital teams following the migration to a single technology platform and marketing spend optimisation across all the brands.
One third of these synergies would be expected to be achieved by the end of 2018, 90% by the end of 2019 and 100% by the end of 2020, if completion of the merger occurs by 31 December 2016.
In addition, the consortium’s proposal said the deal would create the UK’s largest multi-channel gambling operator with strong revenue synergies accrued from cross-selling between brands and products, utilising multi-channel capabilities across retail and digital, and the optimisation of 888’s technology platform.
The planned tie-up would also see Rank CEO Henry Birch take up the same position at the enlarged group, while 888 boss Itai Frieberger would become CEO of the digital side of the business.