Bookmaker William Hill has rejected a £3.6 billion ($4.7 billion) takeover bid by rivals Rank Group and 888 Holdings because it undervalues the company and is “highly opportunistic,” according to The Financial Times.
Shares in William Hill rose over 11% last month when news of a possible takeover emerged, with both Rank and 888 saying a deal would be of “significant industrial logic” given William Hill’s vast physical and online presence.
But even back then William Hill seemed to pour cold water on the idea, saying that “it is not clear that a combination of William Hill with 888 and Rank will enhance William Hill’s strategic positioning or deliver superior value to William Hill’s strategy.”
Rank and 888 made an offer for William Hill on Tuesday at 408 pence a share, but The Financial Times says the board unanimously rejected the offer because it posed a substantial risk to the company by creating “a highly complicated three-way combination.”
William Hill chairman Gareth Davis added that his company “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.”
In response, a spokesman for 888 simply said “we thought they were a bit rude about us but we have nothing to add,” according to The Guardian.
The rejected takeover comes after a generally bad 2016 for William Hill — like most bookmakers it lost millions at this year’s Cheltenham horse racing festival and its CEO Jim Henderson stepped down last month following poor growth in the company’s online division.
But there was good news last week when it announced a 28% half-year increase in profits to £101 million ($132 million) after a strong showing at Euro 2016 and healthy 2016/17 Premier League gambling in the wake of Leicester City’s shock win last season.
William Hill shareholders did not seem happy with the rejected takeover, though, with shares down over 2% this morning: