William Hill rejects latest merger bid from rivals

A BIDDING war could break out for William Hill after the bookie rejected the latest advances from Rank Group and 888 amid rumours of a possible offer from private equity.

The company said yesterday that it was still unconvinced of the merits of a tie-up with casino and bingo hall group Rank and online gaming operator 888.

It rejected a revised offer from the pair, which included the same 199p per share in cash as their original £3.2bn cash-and-share bid, but with an improved share element.

The news came as speculation swirled about a potential rival bid for William Hill by Sky Bet owner CVC Capital Partners.

CVC was likely to keep its powder dry until Rank and 888 showed their hand, a market source said.

Rank and 888 claim their deal, said to value Hill at about £3.47bn, would create Britain’s biggest retail and online gambling company by revenue and profit, with savings of £100m a year. But William Hill said the latest proposal would still sell its shareholders short.

Chairman Gareth Davis said: ‘This revised proposal continues to substantially undervalue the company and the cash element of the proposal has not changed. Therefore, the board sees no merit in engaging.’

If it happens, the tie-up would be the latest in a string of such moves in the industry.

Paddy Power has joined forces with Betfair to form Paddy Power Betfair, Ladbrokes is teaming up with Gala Coral and GVC Holdings bought Bwin.Party in February.

But ratings agency Fitch said the bid by Rank and 888 for William Hill would be particularly risky due to the need to merge three different companies with different businesses.

Under UK takeover rules the Rank and 888 consortium has until August 21 to either announce a firm intention to make an offer or walk away.

Liberum Capital said the revised bid from Rank and 888 valued Hill at 352p a share, or 199p in cash per share plus a 49pc stake versus the previous 45pc. It reckons a bidder would need to offer at least 400p per share.

William Hill closed down 6.4pc, or 21.2p at 312.5p.