The online betting company 888 Holdings and the casino operator Rank Group are having negotiations over a joint takeover bid for William Hill, which has been lately having some difficulties. The joint bit is estimated to £3 billion.
An eventual takeover would be the latest in a series of acquisition deals between gaming groups at a time that most companies are facing some difficulties associated with harsher regulations and increased new taxes have influenced on profits in the sector.
The information was made public through a joint statement of the two companies that revealed that they have joined forces for making a potential acquisition bid for William Hill. Last week, the latter announced that its Chief Executive Officer James Henderson is to leave the company after spending only two years at the position.
According to the two companies’ statement, they had not approached William Hill formally, so making an eventual acquisition bid was not guaranteed. However, 888 Holdings and Rank Group revealed that they find “significant industrial logic” in an eventual takeover deal. Both of them seek to consolidate their complementary land-based and virtual gaming operations, and would like to deliver massive revenue.
The consortium’s interest now changes the situation for William Hill, giving the company an advantage, especially considering the fact that more than a year ago the company itself made an unsuccessful takeover bid of £700 million for 888 Holdings. The two parties did not manage to agree over a price as one of the founders of 888 insisted on a higher offer, so the deal failed.
A weekend report suggested that the online gaming group 888 and Rank Group, which is the current owner of Grosvenor and Mecca Bingo Casinos, would first merge before making a joint offer to purchase William Hill. The combined market value of the two companies is currently estimated to about £1.7 billion.
An eventual combination of the three companies (888 Holdings, Rank Group and William Hill) would result into creating a gambling giant with a market value of about £5 billion, but the bid’s structure is not yet clear.
William Hill is expected to issue a special statement today in order to dismiss the move. According to some experts in the field, a transaction offer would be premature, as such a three-way deal is considered risky. After it made several other acquisitions over the years, including its unsuccessful attempt to join forces with 888, new takeover deals for William Hill are considered unnecessary.
- Author
Olivia Cole
