888 and Rank Group’s Bid for William Hill Rejected in War of Words

888s Chief Executive, Eyal Shaked, utilized Twitter to voice his disapproval of William Hill’s hubris in declining a combined acquisition proposal from 888 and Rank Group. He posits that this choice will prove detrimental to William Hill.

The suggested arrangement, as detailed by the Financial Times, presented a figure of 364 pence per share, assessing the company’s worth based on 888 and Rank’s share values as of August 5th. William Hill’s Chairman, Gareth Davis, rebuffed the proposition as “highly exploitative,” emphasizing that it would result in William Hill stakeholders holding a mere 44.6% ownership in the unified entity.

Davis contended that amalgamating with 888 and Rank would not bolster William Hill’s strategic standing nor yield superior returns for stakeholders in comparison to their existing autonomous approach.

Shaked, conversely, publicly retorted via Twitter, asserting that William Hill’s refusal of the £3.16 billion agreement was a grave misstep fueled by pure vanity. He insinuated that 888 investors were prepared to commit additional capital and this denial signified the culmination of their pursuit of William Hill.

This is not the initial instance of these corporations engaging in merger discussions. In the preceding year, William Hill endeavored to procure 888, but the transaction, purportedly valued around £7 billion, dissolved due to discontent with the appraisal from a pivotal 888 shareholder.

Davis posted on X, stating, “Twelve months ago, it was ‘majority investors choosing greater profits,’ now it’s an advantageous proposition. Until next year…” This open expression of discontent exposes the strain surrounding the suggested amalgamation.

Rank and 888, in their shared announcement, attempted to alleviate concerns, highlighting the “attractive value generation prospect” for William Hill and its stakeholders. They conveyed enthusiasm to collaborate with the William Hill board to finalize an agreement. They are convinced the union would establish a dominant force in the UK and international gaming sectors, encompassing everything from sports wagering and gambling establishments to card games and lottery-style games.

Nevertheless, with William Hill and 888 openly dissenting, and Davis plainly declaring that a three-way merger wouldn’t enhance value, the route ahead is unclear. Further complicating matters, William Hill is presently without a chief executive following James Henderson’s departure in July. It remains uncertain whether they’ll prioritize selecting a new head before any prospective acquisition, or if the strategy involves Rank CEO Henry Birch (former William Hill Online CEO) or 888 CEO Itai Frieberger assuming leadership.

In order to maintain their competitive edge, William Hill and 888 Holdings must act swiftly and reach an agreement with Rank Group before competitors seize the opportunity. The gambling sector is inevitably moving towards consolidation, regardless of their preferences. Moreover, William Hill acknowledged that a three-company merger would present significant logistical challenges, with minimal indication of its potential success.