William Hill: subject to merger offer on Tuesday
PICTURE: David Dew (racingpost.com/photos)
By David Baxter 5:15PM 9 AUG 2016
WILLIAM HILL have firmly rejected a joint-offer from the Rank Group and 888 Holdings to merge with the high street bookmaker, stating the bid “substantially undervalues” the firm.
The complex proposal valued Hills at £3.6 billion, and would have comprised a merger of the Rank Group and 888, forming new company BidCo, that would have then acquired Hills for a combination of cash and BidCo shares.
However, the proposal was considered too complicated and high-risk by the Hills board, and they unanimously rejected it on Tuesday.
In a statement the firm’s chairman Gareth Davis said: “This conditional proposal substantially undervalues William Hill, is highly opportunistic and does not reflect the inherent value of the business.
“It is a very complex three-way combination at a low premium involving substantial risk for William Hill shareholders: execution risk, integration risk and risks of materially increased leverage. The group has a strong team to deliver against our strategy to grow our digital and international businesses so we strongly advise that shareholders take no action.”
Last week Hills released their half-year figures, with operating profit down 16 per cent at £131.1 million, compared to the same period in 2015.
The bookmaker has endured a troubled year, with James Henderson relieved of his duties as chief executive in a bid to arrest the firm’s decline following a profits warning.
Although hitting a high of 341.80 at 11.13 on Tuesday morning, shares in William Hill at time of close on Tuesday were up 0.49 per cent from its opening price at 329.00 pence.