The board at William Hill has rejected a takeover bid from 888 Holdings and Rank Group which valued the gaming operator at around £3.6 billion.
The company said in a statement that the bid envisaged an inter-conditional all-share merger of 888 Holdings and Rank Group, with 888 Holdings acting as the acquiring party, to create BidCo, that would purchase William Hill for cash and newly issued shares in BidCo.
According to the company, the proposal represented a value of 364 pence per share based on the closing price of 888 Holdings and Rank Group on the 5th of August. It added that the proposal therefore represented a premium of only 11% on the William Hill share price of 327 pence on the 8th of August.
Describing a “substantial risk” for shareholders of what it considers “complicated three-way combination”, the firm said: “Having reviewed the proposal with its financial advisers, Citi and Barclays, the board of William Hill has unanimously rejected the proposal as it substantially undervalues William Hill.
“In addition, the board of William Hill does not believe that a combination of William Hill with 888 and Rank will enhance William Hill’s strategic positioning or deliver superior value for shareholders compared against William Hill’s strategy, which is focused on increasing the group’s diversification by growing its digital and international businesses.”
The discussions about the takeover begun last month after William Hill announced the departure of its chief executive James Henderson. The company appointed chief financial officer Philip Bowcock to the role on an interim basis while a permanent replacement is sought.
About William Hill
The company was founded in 1934 as a postal/telephone betting service and since then it became a huge player in the industry. Employing over 16,000 people in nine countries, the firm continues to transform its business, investing in state-of-the-art technology and innovation and extending its vast product range.