Rank and 888 to Launch Shocking Bid for William Hill

Posted on: July 25, 2016, 01:45h. 

Last updated on: July 25, 2016, 01:46h.

888 and Rank to bid for William Hill
William Hill moved to belittle the idea of a reverse acquisition by 888 and Rank, although it would certainly be interested in 888’s digital expertise. (Image: William Hill)

Gambling groups Rank Group and 888 Holdings is to launch a shock double bid for William Hill, Britain’s biggest bookmaker.

The two companies announced on Sunday night that they had formed a consortium and were weighing a reverse takeover of the bookmaker that would value William Hill at around £3 billion ($4 billion).

It is unclear whether 888 and Rank, which owns Grosvenor, the UK’s biggest casino chain, will seek to merge before making an offer. Under UK takeover panel rules, they must now submit a firm bid by August 21.

In their joint statement, Rank and 888 said they saw “significant industrial logic [in the proposal] through consolidation of their complementary online and land-based operations, delivery of substantial revenue and cost synergies and from the anticipated benefits of economies of scale, which will accrue to all shareholders.”

If it were to happen, such an acquisition would form a consolidated gambling power house to challenge those created over the past year by the mergers of Paddy Power and Betfair, as well as Ladbrokes and Coral.

Consolidation Period

The UK gambling industry has been undergoing a necessary period of consolidation over the past two years, as companies seek to achieve greater scale and cost savings in the face of increased taxation and regulation throughout Europe.

William Hill today acknowledged that it had received a “highly preliminary approach” from the consortium, but moved, predictably, to belittle the proposal.

“The board of William Hill would listen to and consider any proposal which might be forthcoming from the consortium,” it said. “However, 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.”

William Hill CEO Ousted

William Hill has been left in a vulnerable position since its CEO, James Henderson, was ousted by the board last week, apparently for his failure to shore up the bookmaker’s online wing. From this perspective, 888’s digital expertise might ultimately prove to be tempting.

For 888, meanwhile, it really would be a reverse takeover, in every sense of the word. 888 survived a £750 million ($1.47 billion, at the time) takeover attempt by William Hill in February 2015 when 888’s biggest shareholder refused to sell. It has also avoided being acquired by Ladbrokes on several occasions over the past few years.

Last year, it was engaged in a high-stakes bidding war with GVC Holdings for the right to acquire bwin.party, but threw in the towel in the face of GVC’s final bid of $1.6 billion.