Thanks, but no thanks.
That was the answer that UK bookmaker William Hill had for the revised takeover bid from rivals Rank Group and 888 Holdings on Monday, saying that it still does not see any merit in engaging with the joint venture for a proposal that “substantially undervalues” the company.
Rank and 888 has been eyeing a merger with Hills to create UK’s largest multi-channel gambling operator by revenue and profit. Last week, the consortium submitted a joint £3.16 billion ($4.1 bilion) bid, but the high-street bookmaker spurned the cash-and-stock offer, which represents a 16% premium on Hills’ current share price, calling it a “highly opportunistic” bid.
Unfazed, the two suitors returned with a fresh approach over the weekend, offering Hills’ investors a larger share of the merged company, according to UK media. Rank and 888’s revised offer still has the same 199 pence per share in cash offer, but it now offers 0.86 new shares instead of the initial 0.725 shares, which means that William Hill shareholders would own 48.8 percent of the combined group, up from the 44.6 percent under the original proposal.
But William Hill remains unimpressed.
Gareth Davis, chairman of William Hill, told Financial Times that not much has changed in the revised proposal, save for the shareholders’ proposed ownership of the combined group.
“This revised proposal continues to substantially undervalue the company and the cash element of the proposal has not changed,” Davis said, according to the news outlet. “I can’t engage in something based on risk, debt and hope.”
The consortium’s offers are part of the consolidation wave that is currently sweeping the UK market, first with the hook up between Paddy Power and Betfair, followed by GVC acquiring Bwin.party, and then a merger between Ladbrokes and Gala Coral Group.
The deal was viewed in some circles as symbiotic, combining Hills’ dominant retail bookmaking presence with Rank’s casino and bingo operations and 888’s thriving online presence. Hills’ online division has struggled of late, while 888 has been firing on all cylinders. But Davis previously said Hills had a “strong team” working on reviving its sputtering online business and therefore he strongly advised that shareholders “take no action.”
Rank and 888, however, are not giving up. Itai Frieberger, CEO of 888, was quoted by FT saying the consortium is “extremely excited by the prospect of creating a dynamic, broad based, multi-channel gambling business of real scale.”