The chips have fallen: Rank Group and 888 Holdings abandon bid for William Hill
Rank Group and 888 Holdings have abandoned their takeover bid for bookmaker William Hill.
A consortium formed by Grosvenor Casinos operator Rank and online giant 888 Holdings previously submitted two bids for the high street gambling stalwart, which were both promptly rejected.
Rank and 888 had proposed a three-way tie-up in which the two companies would merge to form a new company called Bidco and contemporaneously acquire William Hill.
The gambling groups said in a statement today that it had "not been possible to meaningfully engage with the board of William Hill" over the takeover, which they maintain would have created a "transformational force in the global betting and gaming industry".
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Itai Frieberger, chief executive of 888 Holdings, said:
We are disappointed that the board of William Hill did not share our vision of the combined businesses.
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.
Frieberger told City PM last week that everything William Hill needs, Rank and 888 "have on steroids".
The first offer, of £3.6bn, was launched on 9 August and valued William Hill at a rate of 364p per share.
The revised offer, which was shot down on Monday, maintained the 199p per share cash offer for the bookie, but upped the stock element of the deal so that William Hill investors would own 48.8 per cent of the new entity, up from 44.6 per cent.
William Hill chairman Gareth Davis said:
We note the Consortium's confirmation that it no longer intends to make an offer for William Hill. We will continue to focus our efforts on our strategy to deliver value for shareholders.
The team has a clear plan to grow by diversifying digitally and internationally and four priorities to get us there. We have had a good start to the second half of the year and the board now expects operating profit for 2016 to be at the top end of the previously guided £260-280m range.
Struggling to break into online gambling sphere
Rank and 888 claimed the three-way tie-up would free up £100m in cost savings and increased marketing effectiveness.
However, William Hill chairman Gareth Davis maintained both deals had "substantially undervalued" the bookie and that the company was positive it could make headway in the online market.
Shares in the group plunged in March when it warned of a £25m fall in online profits in 2016.
In July, chief executive James Henderson announced he would step down after failing to turn the group's online operations around and a difficult start to 2016.
William Hill now remains the only major UK bookmaker yet to consolidate, despite a wave of mergers and acquisitions that have swept the gambling industry.
These include the tie-up between Paddy Power and Betfair, which completed in February this year, and an ongoing merger between Ladbrokes and Gala Coral.