Offers made by both 888 Holdings and The Rank Group, proposing a three-way merger with William Hill, have both been pulled. The two non-binding proposals to merge, which were made on the 8th and 14th August respectively, have been rejected and both parties haven't expressed an interest in continuing with the merger bid.
888 and Rank both shared their disappointment in a joint statement, commenting that the “proposed transaction would have created a transformational force in the global betting and gaming industry.” The pair revealed that the reason for the pull out was an inability to “meaningfully engage with the board of William Hill.”
Rank And 888 Drop Merger Proposal
Although it appears that William Hill's disinterest in the proposal proved to be the ultimate road block to the project, 888 and Rank remain just as convinced by the business model.
888 CEO, Itai Frieberger, said:“We believe that there was compelling industrial logic for the combination of these highly complementary businesses, which in our view would have brought scale, diversification, and strong revenue and cost synergies, from which all shareholders would have benefitted.”
Henry Birch, Rank CEO, expressed similar regret by adding: “We strongly believe that the transaction would have created significant value for all three sets of shareholders.”
The Future of William Hill
William Hill's chairman, Gareth Davis acknowledged the closure of the proposal by saying that: “We note the consortium’s confirmation that it no longer intends to make an offer for William Hill.” While William Hill clearly don't share the same views on the value of the merger as the two other parties, they nonetheless released a statement about their plans to “continue to focus our efforts on our strategy to deliver value for shareholders.”
What this means for the future of William Hill, we can't be sure of at the moment. Whereas, the rest of the industry appears to be heading down the route of mergers and acquisitions, it's still uncertain whether William Hill simply don't see that as a valid course to take, or they just didn't want to take it with 888 Holdings and The Rank Group.
William Hill are in a strong position by themselves at the moment, with their operating profit for the second half of 2016 looking to deliver on the top end of their predictions, which range from between £260m – £280m. If the trend for an increase in mergers and acquisitions continues, however, it'll be interesting to see how William Hill responds, given their recent refusal of such a proposal.