William Hill gives Rank/888 a firm no over acquisition offer, calling it “opportunistic”

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illiam Hill has confirmed it has rejected a takeover approach from 888 Holdings and Rank Group, reasoning that “it substantially undervalues William Hill.”

The Financial Times reported earlier today (Tuesday) that Rank/888 had submitted an offer for William Hill worth 364p per share, potentially increasing to 408p a share, valuing the business at up to £3.6bn, according to two people briefed on the plans.

William Hill said the proposal included an inter-conditional all-share merger of 888 and Rank, with 888 acting as the acquiring entity to create an enlarged group that would be known as BidCo.

BidCo would then buy William Hill for 199p in cash plus 0.725 BidCo shares per William Hill share, leaving William Hill with a 44.6% ownership of the new group, and in total, the bid did add up to the reported 364p a share, based on the closing price of 888 and Rank on 5 August.

William Hill indicated that it would also reject any future offer by stating: “Having reviewed the proposal with its financial advisers, Citi and Barclays, the board of William Hill has unanimously rejected the proposal.

“In addition, the board of William Hill does not believe that a combination of William Hill with 888 and Rank will enhance William Hill's strategic positioning or deliver superior value for shareholders compared against William Hill's strategy.”

Gareth Davis, William Hill Chairman, 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."

Rank/888 have a deadline of no later than 5pm on 21 August for when they must confirm whether or not they intend to make another offer.

Both Rank and 888 are yet to comment in response.

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