Interactive

UK – Rank and 888 team up for punt at William Hill

By Phil - 25 July 2016

Rank Group, operators of Grosvenor Casinos and Mecca Bingo has joined forces with online operator 888 Holdings, forming a consortium that aims to buy British bookmaker William Hill.

The deal between Rank and 888 would create a £2bn gambling group with reports they could pay up to £3bn for William Hill.

The three way deal would combine Britain’s biggest casino and bingo operator with 60 casinos and 90 bingo halls, its biggest high street bookmaker with 2,370 bookmakers and one of its biggest names in online betting.

Rank and 888 said in a statement: “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.

The companies highlighted that no formal bid had yet been placed with William Hill’s board.

It added: “In relation to the proposed transaction, no decision has yet been taken as to whether 888 would be an offeror or offeree company in respect of certain o the steps that may be taken in order to implement the proposed transaction. Accordingly, there can be no certainty that any transaction will ultimately take place, nor as to the terms on which any such transaction might be constituted.”
William Hill, which last week accepted the resignation of its CEO, James Henderson, confirmed it had been approached though.

It said: “The board of William Hill would listen to and consider any proposal which might be forthcoming from the consortium. However, 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.”

Last year William Hill tried to buy 888 in a £720m eal but a price couldn’t be agreed. Since then several super powers have been created with rivals Ladbrokes and Gala Coral agreeing a £2.3bn and Paddy Power and Betfair signing off on a £5bn merger in September.
888 missed out on buying Bwin.party last year with GVC Holdings completing a £1.1bn takeover.

Henry Birch, Chief Executive of Rank, said recently: “We have two main priorities for the next 12 months. The first is to maintain our performance improvement. Rank has had a really strong 12 months and we need to make sure we continue that momentum into the next financial year. We have the headwind of a whole year “ Growth in digital revenue – at 21 per cent– is particularly pleasing” of digital gaming taxes (the “point of consumption tax” introduced in December 2014) versus the seven out of 12 months just passed and our comparators will be that much more difficult coming out of a strong year. But against that, we have an ongoing schedule of initiatives and improvements that should continue to grow our business and we remain confident that we’ll deliver on this objective.

“The second priority is to put in places one of the key building blocks for future growth. Most obvious amongst these is the launch of our new digital platform, supplied by Bede,” he added. “Not only do we expect this to drive improved performance in our digital business, but it will be a key part in joining up our retail and digital systems. Those retail systems will also be upgraded with a multi-channel world in mind, albeit within the following financial year. The next 12 months will also see the launch of a new bingo club format and a new digital brand, both with clear growth potential, but grounded within a modest capital commitment.”