Bookmaker William Hill’s share price jumped more than 11% this morning after rumours of a merger with Rank Group and 888 Holdings gained traction.
William Hill confirmed it had received a “highly preliminary” approach about a deal with its gambling rivals but it is still ambivalent about going for it right now, saying in a statement:
“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, which is focused on increasing the group’s diversification by growing its digital and international businesses.”
After jumping over 11% at opening this morning, William Hill’s share price settled to almost 7% higher as of 10:35 am:
Rank and 888 have not confirmed their approach to William Hill outright but did say on Sunday that it would make a lot of sense for all parties, according to the Guardian:
“The consortium sees 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.”
William Hill has a well-known chain of High Street bookmakers across the UK but has a weak online operation. 888, meanwhile, specialises in online betting, with a history in poker, while Rank operates Grosvenor Casinos and Mecca Bingo.
It is not known how much Rank and 888 would pay for the William Hill brand, but Simon French, an analyst at Cenkos Securities, told the Financial Times that any offer “would have to be pitched at well over 400p per share.”
News of the merger comes after William Hill announced the abrupt departure of its CEO James Henderson. The company did not give a reason for the decision, but some speculate that it is down to Henderson’s failure to anticipate the growth of the online betting market.
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