William Hill

William Hill Rejects 888 Bid, Calls The Offer “Highly Opportunistic”

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The board of William Hill decided to reject the $4,7b offer made by 888Holdings last week.

Less than a week after we learned that 888Holdings had plans to add William Hill to their gaming portfolio, the board of the British gambling giant inform us that the deal won’t happen.

In a note sent to the press on August 9, William Hill announced their decision to reject the offer made by 888Holdings and Rank Group and pass on the $4.7 billion offer.

"Having reviewed the proposal with its financial advisers, Citi and Barclays, the board of William Hill has unanimously rejected the proposal as it substantially undervalues William Hill."

To motivate the decision to reject the offer, William Hill mentioned the too low premium offered by the bidders on the company’s shares.

"The Proposal represents a premium of only 16% to the William Hill share price of 314 pence on 22 July 2016 (being the last trading date prior to the announcement of a possible offer by the Consortium) and a premium of only 11% to the William Hill share price of 327 pence on 8 August 2016 (being the last trading date prior to this announcement," the press release continues.

Also, "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, which is focused on increasing the Group's diversification by growing its digital and international businesses."

"This conditional proposal undervalues William Hill, is highly opportunistic and does not reflect the inherent value of the business."

Speaking about the operation, William Hill’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," Davis concluded.

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