The gaming operators Rank Group and 888 Holdings have formed a consortium and have launched a shock double bid for William Hill, Britain’s biggest bookmaker. The purpose of their ‘partnership’ is to buy their struggling rival for the amount of £3 billion.
“Combining the three businesses would create a £5 billion gambling giant likely to enter the FTSE 100.”
It is important to note that the partnership between the Rank Group and 888 Holdings is only a consortium which means the bid can take on an entirely different structure.
The pair has said that they see “significant industrial logic in the combination, through consolidation of their complementary online and land-based operations, delivery of substantial revenue and cost synergies and from the anticipated benefits of economies of scale, which will accrue to all shareholders.”
This potential move from Rank and 888 Holdings for William Hill is the most recent in a series of disturbances in the gaming sector that is facing increased taxes, growth in competition and suppression on lucrative fixed-odds betting terminals.
In the last year the three companies have experienced different fortunes on the stock market. Shares for William Hill have dropped by 31%, Rank has slipped about 3% and 888 Holdings have gone up with about 29%.
William Hill has said that they would consider any proposal that might come from the consortium. It remains unclear if the combination of William Hill with 888 and Rank will enhance their strategic position or deliver superior value to it. William Hill’s strategy is focused on increasing diversification by growing their international and digital businesses.