Mon, 25 Jul 2016 | MERGER
Gambling firms 888 and Rank Group have approached William Hill to discuss a potential merger.
In response William Hill said it would “listen to and consider” any and all proposals, but conceded that it did not immediately see any “superior value” in combining the three companies.
Rank, the largest land-based casino chain in Britain, and online operator 888, said they saw “significant industrial logic in the combination”.
The merger approach was made in the days after James Henderson, William Hill's chief executive, was dislodged from his position after a run of profit warnings. He had only stepped into the post in August 2014, but had failed to solve the issues at the troubled online business.
In William Hill's latest trading update, turnover had dropped 11 per cent for its online division in the 17 weeks to 26 April 2016. Its shares have fallen by 21 per cent since the start of 2016, valuing the company at £2.7 billion.
To abide by UK takeover rules 888 and Rank have until 21 August to put in an offer or walk away. William Hill tried to buy 888 last year, offering £720 million, but 888 rejected the offer for being too low.
There has been consolidation among other players in the betting/online gaming industry, with Ladbrokes and Gala Coral agreeing a £2.3 billion merger, which won preliminary approvals in May. The enlarged group would be bigger than William Hill, which presently has the most shops in the UK. Meanwhile, Paddy Power and Betfair agreed to team up in September last year.
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