William Hill’s board has reiterated its opposition to a proposed £3.6 billion (€4.2 billion/$4.7 billion) takeover by 888 and Rank Group, after the pair gave further details of what they believe would be a “transformational force” in the global gaming industry.
888 and Rank tabled a bid on Monday, which Hills’ board rejected as it “substantially undervalues” the gaming operator.
The firms have since released a joint statement in which they outlined their reasons for targeting Hills, despite its recent troubles, highlighted by a 16% drop in operating profit during first half of 2016 and the recent departure of chief executive James Henderson.
The pair published details of £100 million of annual cost savings they expected to generate by 2020 from a three-way tie-up, by merging digital platforms, consolidating offices, and combining marketing spend.
However, the update was described as having “no new proposal or substantive new information” by Hills.
William Hill chairman Gareth Davis said: “The board continues to see no merit in engaging on the basis of a proposal that substantially undervalues the group. In addition, as we have said before this proposal is highly opportunistic, complex and poses significant risk for our shareholders.”
In their statement, the consortium said a merger would create “a significant and transformational force in the global betting and gaming industry, and the UK’s largest multichannel gambling operator by revenue and profit”.
It suggested the combined group would be included on the FTSE 100 with Rank chief executive Henry Birch taking the same role at the new company. Itai Freiberger, chief executive of 888, would become chief executive of digital.
Following completion of the proposed combination and based on the terms of the proposal, the statement said William Hill shareholders would represent 44.7% of the enlarged group, and that 888 and Rank shareholders would represent 25.7% and 29.6% respectively.
Frieberger warned that the William Hill board “need to see the opportunity” that was on offer, and added that “the price is something that we can always discuss”.
“This is as big an opportunity for us as it is for them,” he said. “What we bring to the table is immense value, bringing together retail, online, international and management. We tick all the boxes.”
Birch told the Daily Telegraph: “To us, this combination is blindingly obvious.”