Takeover fever as string of bidders line up offers
Gaming firms raise stakes on William Hill and ITV plans Peppa Pig swoop
A SUMMER frenzy of corporate takeovers is set to heat up, with bidders for bookmaker William Hill and leading TV production group Entertainment One expected to boost their offers by hundreds of millions of pounds.
Casino company Rank and online gaming firm 888 Holdings are preparing to stake an extra £183million on their bid for William Hill, Britain’s biggest bookmaker, and could strike with a fresh offer as early as tomorrow.
And ITV is also understood to be preparing to raise its bid for Entertainment One, which produces children’s TV programme Peppa Pig, by £188million.
The bid battles have emerged in a flurry of City activity as bidders, who held back ahead of the Brexit vote, have finally unleashed their plans. Other deals include the £24.3billion takeover of chip designer ARM Holdings by Japan’s SoftBank.
Rank and 888 Holdings launched their audacious £3.2billion joint bid last month, but were knocked back when the bookmaker flatly rejected the offer last week. But City sources said the pair were preparing to raise the offer from 364p a share to 385p, putting an extra £183million on the table.
William Hill chairman Gareth Davis told The Mail on Sunday this weekend that he was expecting a fresh bid, but would want far more than £3.2billion. ‘If they are in any way serious, one would expect them to come back,’ he said. ‘But if they do, it would have to be at a substantially greater value to William Hill shareholders.’
Rank and 888’s plan is for a complex, threeway merger, which would create a group with interests from casinos to bookmakers and gambling websites.
William Hill tried to take over 888 for £700million last year but could not conclude a deal, and some pundits have suggested it could revive that plan, turning the table on one of its would-be buyers. However, Davis poured cold water on such an idea. He said: ‘The attraction of 888 for us at that time was its technological capability. But having not secured that deal
we have ploughed our own furrow and secured our own technology.’
Meanwhile, after months of rumours, broadcasting giant ITV last week submitted a 236p-a-share bid for Entertainment One, valuing it at just over £1billion.
Entertainment One, which is the UK distributor for this summer’s major hit children’s film release, The BFG, also rejected its suitor.
Sources said ITV could be willing to pay up to 280p a share or almost £1.2billion for Entertainment One. However, it is not clear when ITV would submit a fresh proposal.
The summer deal bonanza comes during what is typically a quiet period for the City. Professor Scott Moeller, who runs Cass Business School’s mergers and acquisitions research centre, offered an explanation for this frenzied round of dealmaking.
He said: ‘For two to three months before the Brexit referendum, a number of deals were being held back, in some cases because of pricing disagreements, as buyers and sellers expected a bullish market once the referendum was over – but that was assuming the rejection of the leave vote.
‘That said, a number of deals were therefore being held back that made strategic sense on a global basis, and then when the unexpected vote happened, they still made sense, but pricing was now a known factor – at least for the short term.’