William Hill swiftly moved to reject the £3.3 bn takeover bid proposed by the strategic consortium of Rank Group and 888 Holdings, after the pair formally confirmed their proposal to acquire the bookmaker yesterday afternoon.
[dropcap]T[/dropcap]he board of the betting operator said that the offer “substantially undervalued” its corporate enterprise, branding the move “highly opportunistic.” Adding that it saw no enhanced value in merging its operations with Rank and 888 assets, William Hill governance revealed that it unanimously rejected the Proposal, following advice by Citi Group and Barclays, deciding not to forward the bid to its investors.
The Group has a strong team to deliver against our strategy to grow our digital and international businesses so we strongly advise that shareholders take no action.
The bookmaker also detailed concerns regarding a “complicated three-way combination” which would be leveraged by approximately £2.2 bn in refinanced debt, in order to complete the deal, representing a “substantial risk” for the enterprise’s stakeholders, William Hill chairman, Gareth Davis, said, “This conditional proposal substantially undervalues William Hill, is highly opportunistic and does not reflect the inherent value of the business. It is a very complex three-way combination at a low premium involving substantial risk for William Hill shareholders: execution risk, integration risk and risks of materially increased leverage.
“The Group has a strong team to deliver against our strategy to grow our digital and international businesses so we strongly advise that shareholders take no action.”
With the ball back in the consortium’s court, the UK gambling industry awaits whether the pair will counter with a further bid, or whether Rank and 888 will move to merger separately.