888 Holdings and Rank Group form consortium to potentially bid on bookmaker William Hill
The United Kingdom��s gambling industry could be set for more consolidation after reports suggesting 888 Holdings and Rank Group could pay up to ��3 billion for bookmaker William Hill.
This news came only days after William Hill��s CEO, James Henderson, stepped down from his role with immediate effect following the British company issuing a profit warning. William Hill announced to its investors that profits for the year to December 31 would likely be ��260 million, down from initial estimations of ��307 million.
888 Holdings and Rank, the latter being the owner of Mecca Bingo and Grosvenor Casinos, this weekend issued a joint statement saying they had formed a consortium for a potential takeover of William Hill, but confirmed no formal bid had been made, and there is no guarantee of a formal offer being made.
��The consortium sees significant industrial logic in the combination, through consolidation of their complementary online and land-based operations, delivery of substantial revenue and cost synergies and from the anticipated benefits of economies of scale, which will accrue to all shareholders.��
The three companies have had very different paths over the past 12 months. While William Hill��s shares have plummeted approximately 31%, and Rank��s having fallen 3%, 888 has added 29% to its share price.
In February 2015, it was William Hill who attempted to takeover 888 Holdings with a ��700 million offer. However, reports suggested one of 888��s major shareholders said the offer undervalued the company, and talks of an acquisition ended soon after.
Also in 2015, 888 attempted to merge with bwin.party digitial entertainment plc, but ultimately lost out in the bidding war to now-owners GVC Holdings.
Under the rules of the UK Takeover Panel, 888 and Rank now have until August 21, 2016 to formally make an offer for William Hill.
Should the move go ahead, it will see further consolidation of the British gambling industry. In addition to GVC Holdings acquiring bwin.party in a reverse takeover, Betfair and Paddy Power merged, and the ��2.3 billion deal between Ladbrokes and Gala Coral is still awaiting clearance after hitting a snag in relation to competition rules.
Regulators have informed Ladbrokes and Gala Coral that they need to sell several hundred betting shops if they are to merge, as the newly formed company would have too strong of a presence on the British high street. Should the deal complete, Ladbrokes and Gala Coral��s new company would overtake William Hill as Britain��s biggest bookmaker.
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