888 and Rank Group Make Bid for William Hill £3 Billion Takeover
The UK’s gambling industry could potentially become even more consolidated after recent reports arose, suggesting that 888 Holdings and Rank Group could offer up to £3 billion for the long-standing bookmaker William Hill.
This development came a few days after James Henderson stepped down from his role as the William Hill CEO. His tenure was looking unlikely to continue after the British bookmaker issued a profit warning recently. William Hill announced to their investors that profits for this year would most likely be around the £260 million mark, a decrease from their initial estimations of £307 million profit.
888 Holdings and Rank have paired up to make the offer to William Hill. Rank is the owner of Mecca Bingo and Grosvenor Casinos. Last week the two companies made a joint statement saying they had formed a consortium for a potential takeover of William Hill, but have yet to confirm a formal bid and there is no guarantee yet of a formal offer being made to the William Hill company.
They’ve stated that, “the consortium sees significant industrial logic in the combination, 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.”
During the last year, the three companies in question have had very different fortunes. William Hill’s shares have dropped about 31%, and Rank’s have fallen 3%. In contrast, 888 has added 29% to its share price over the past 12 months. In February 2015 William Hill attempted to launch its own takeover bid of 888 Holdings with an offer of £700 million. However, one of 888’s major shareholders stated that the offer undervalued the company and the acquisition talks eventually collapsed. 888 attempted to merge with Bwin in 2015 also, but lost out in the bidding war to GVC Holdings.
888 and Rank now have until the 21st of August 2016 to formally make an offer for William Hill. If the move goes ahead, it will see even more consolidation of the British gambling industry. As well as GVC Holdings acquiring bwin.party, Betfair and Paddy Power merged together, and the deal between Ladbrokes and Gala Coral is still awaiting clearance after encountering some problems in relation to gambling competition rules. Should the deal be finalised, Ladbrokes and Gala Coral’s new company would then become the UK’s largest bookmaking company.