888 and Rank in joint takeover discussions with William Hill

Rank Group and 888 Holdings have confirmed that they are considering a joint takeover offer for William Hill.

“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,” 888 and Rank said in a joint statement.

The two also said that no formal offer has yet been made to the board of William Hill, warning that there is no certainty that an approach or transaction will take place.

British takeover guidelines dictate that Rank and 888 must now make a formal offer by 21 August.

The development follows last Thursday’s departure of William Hill CEO James Henderson after two years in the role.

William Hill has issued a statement of its own confirming the receipt of a preliminary approach: “The board of William Hill would listen to and consider any proposal which might be forthcoming from the consortium.

“However, it is not clear that a combination of William Hill with 888 and Rank will enhance William Hill’s strategic positioning or deliver superior value to William Hill’s strategy which is focused on increasing the group’s diversification by growing its digital and international businesses.”

Talks between the three represent the latest development in intensifying industry M&A activity over the last two years, with Ladbrokes and Gala Coral announcing their plans to merge in July 2015, while Paddy Power Betfair was formed in early February 2016.

William Hill failed in a bid to acquire 888 in 2015, 888 rejecting the £720m offer as too low.

Rank Group and William Hill are linked through current Rank Group CEO Henry Birch, who joined Rank in 2014 having previously served a four-year stint as CEO of William Hill Online from 2008 to 2012.