William Hill rejects takeover offer

William Hill has rejected a takeover offer from Rank Group and 888, saying that the duo's proposal for a £3.6 billion three-way merger 'substantially undervalues' the high street bookmaker.

The William Hill Silver Trophy Handicap at Ripon Racecourse Photo: John Giles/PA Wire.

Responding to a formal takeover approach from the casino giant and online operator, William Hill said it does not believe a tie-up would enhance its “strategic positioning or deliver superior value for shareholders” compared with its own strategy.

The firm said: “Having reviewed the proposal with its financial advisers, Citi and Barclays, the board of William Hill has unanimously rejected the proposal as it substantially undervalues William Hill.”

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The offer, amounting to 364p per share, also involved saddling the newly formed company with £2.2 billion of debt.

Gareth Davis, chairman of William Hill, said: “This conditional proposal substantially undervalues William Hill, is highly opportunistic and does not reflect the inherent value of the business.

“It is a very complex three-way combination at a low premium involving substantial risk for William Hill shareholders: execution risk, integration risk and risks of materially increased leverage. The group 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.”

Last week, William Hill said that half-year profits were boosted by a strong Euro 2016, which helped to offset a dire Cheltenham Festival.

Commenting on the results, interim chief executive Philip Bowcock told investors: “While the first half of 2016 has been challenging, William Hill is a strong business with three of our four core divisions performing well.”

William Hill is a major employer in Yorkshire, with more than a fifth of its global workforce in the region.

The company employs 1,300 people in Leeds alone.