888 owner condemns William Hill’s acquisition rejection

88 Holdings owner Eyal Shaked has used his Twitter account to accuse William Hill’s ego of causing the rejection of his company’s joint offer with the Rank Group to buy the business.

William Hill confirmed on Tuesday it had rejected a 364p a share offer from its fellow operators, based on the closing price of 888 and Rank on 5 August, following a reporting of the offer by the Financial Times.

Gareth Davis, William Hill Chairman, called the offer, which would have left William Hill with a 44.6% ownership of the combined group that would be known as BidCo and would also involve 888 acting as the acquiring entity over Rank, “highly opportunistic.”

Davis also said: “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.”

Shaked responded by tweeting: “Pure ego made #WilliamHill reject #Rank and #888 £3.16bn bid and that will be their downfall.

“#WilliamHill Rejects #888 offer. That's the last I want to hear about #888 shareholders not willing to go big.”

This is not the first time 888 and William Hill have held discussions over an acquisition deal, as the latter attempted to purchase the former last year, but the reported offer of around £700m was rejected as it was claimed a key 888 stakeholder did not agree on the valuation.

Shaked tweeted: “Last year it was ‘key shareholder opting for higher returns’, now its an opportunistic offer. See you next year...”

Rank and 888 said in a joint statement: “888 and Rank believe the proposal represents a compelling value creation opportunity for William Hill and its shareholders and would welcome the opportunity to engage with the board of William Hill on a constructive basis with the goal of consummating a recommended transaction. “[A deal]creates a significant and transformational force in the global betting and gaming industry and the UK’s largest multi-channel gambling operator by revenue and profit with a complementary combination of retail and digital brands and proprietary technology, content and products across sports betting, casino, poker and bingo.”

Where does the deal go from here?

With the dispute between William Hill and 888 being laid out in front of the public, what seems clear is that the disagreement has created a level of ill feeling that makes it difficult to see a future deal surfacing, particularly with Davis’ comment that a combination of all three business will not lead to superior value.

William Hill is without a permanent CEO having announced James Henderson had stepped down from the position in July, and that may be a priority before any M & A activity, unless the plan changes so that Rank CEO Henry Birch, formerly CEO of William Hill Online, or 888 CEO Itai Frieberger, took over.

Where the deal could be given some legs is if one of William Hill or 888 were to drop out of the process and the other two companies went it alone, particularly as William Hill referenced the three-way combination as “highly complicated” and there is so little evidence, if any, of three-way acquisition deals working out.

With consolidation being seemingly necessary to compete in the space, this could become a race to see which of William Hill and 888 could sort out a deal with Rank before the other can beat them to it.