William Hill questions 888, Rank merger rationale
Hills confirms approach but says it is not clear whether a potential deal will "deliver superior value" to current strategy
William Hill confirmed it has been approached by 888 Holdings and The Rank Group regarding a potential combination of the three firms, but has questioned whether a three-way tie-up would advance its current strategy.
In a statement this morning, the London-listed bookie said a consortium consisting of 888 and Rank had made a “highly preliminary approach” over the weekend and that it would be willing to listen to any transaction proposals.
However, Hills stressed the consortium had yet to produce any firm details on the nature of the deal, which it said would need to fit with the operator’s current growth strategy.
“It is not clear that a combination of William Hill with 888 and Rank will enhance William Hill’s strategic positioning or deliver superior value to William Hill’s strategy which is focused on increasing the Group’s diversification by growing its digital and international businesses,” the company said in a statement.
Rank owns the largest number of bingo and casino venues in the UK and William Hill is thought to be unsure what the rationale around an expansion in land-based gaming would be.
On Thursday William Hill sacked its chief executive James Henderson, primarily for his failure to grow the Online business as anticipated, following which chairman Gareth Davies told EGR businesses were now judged on their digital performance.
“At the end of the day we just have to face the fact that gambling businesses now are largely rated on their online performance and capability rather than the overall business,” Davies said.
Henderson had led William Hill during the operator’s attempted bid to acquire 888 last year for ?750m after the parties were unable to overcome “a significant difference of opinion” with a key shareholder of the target firm.
The consortium is required by the UK takeover code to either announce a firm offer or that it does not intend to make a bid by no later than 5pm on 21 August 2016.
William Hill’s share price was up 7.37% on the London Stock Exchange at the time of writing.