The board at William Hill has reiterated its opposition to a proposed £3.6 billion takeover by 888 Holdings and Rank Group, after the companies gave further details of what the firms believe would be a “transformational force” in the global gaming market.
888 Holdings and Rank Group proposed a bid on Monday, which William Hill’s board rejected as it “substantially undervalues” the gaming operator.
Both the companies have since released a joint statement in which they outlined their reasons for targeting William Hill, despite the company’s recent troubles, highlighted by a 16% drop in operating profit during first half of this year and the recent departure of chief executive James Henderson.
Both the companies published details of £100 million of annual cost savings they expected to generated by 2020 from a three-way tie-up, by combining marketing spend, consolidating offices and merging digital platforms.
The update, however, was described as having “no new proposal or substantive new information” by Hills.
“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,” William Hill chairman Gareth Davis said.
In their statement, the consortium said the firms’ merger would create “a significant and transformational force in the global betting and gaming industry, and the UK’s largest multichannel gambling operator by revenue and profit”.
It suggested the combined group would be included on the FTSE 100 with Rank Group chief executive Henry Birch taking the same role at the new firm. 888 Holdings chief executive Itai Freiberger would become chief executive of digital.
After completion of the proposed merger and based on the terms of the proposal, the statement said William Hill shareholders would represent 44.7% of the enlarged group, and that 888 Holdings and Rank Group shareholders would represent 25.7% and 29.6% respectively.
Freiberger said that William Hill needs to “see the opportunity” that was on offer and added that “the price is something that we can always discuss”.
“This is as big an opportunity for us as it is for them,” he said. “What we bring to the table is immense value, bringing together retail, online, international and management. We tick all the boxes.”