This William Hill Merger Didn't Fly
Published: Monday, December 19, 2005 Online-Casinos.com
THIS WILLIAM HILL MERGER DIDN'T FLY
More M&A activity
It had the potential to create the biggest UK gambling group to date, but following
a presentation by William Hill's CEO David Harding the board of directors
of the bookie group walked away from it, according to the Sunday Times.
William Hill had earlier approached bingo and casino group Rank with a
view to a merger that could have led to the creation of a GBP 4 billion gaming
giant. The Hill position is understood to have been a possible all-share merger.
The Times reported that the merger was rejected because of the companies' different
ratings on the stock exchange, with the share price of Rank inflated by recent
bid speculation.
The Rank board was understood to be aware of the talks, but did not put the approach
to the vote.
A spokesman for Rank declined to respond to the report, while William Hill was
unavailable to comment.
Rank owns 36 Grosvenor casinos, some 120 Mecca bingo halls and more than 100 Hard
Rock Cafes in 38 countries.
A deal would have harnessed these gaming assets to the 2,000 betting shops owned
by William Hill, which also has a strong presence on the internet.
The two companies are broadly of a similar size with William Hill valued at GBP
1.92 billion by the market and Rank worth GBP1.97 billion. But the bookmaker makes
more profits, totalling GBP 123.9 million after the first six months of its financial
year compared with GBP 71 million for Rank.
Traditional gaming groups are looking at ways to consolidate or cut costs following
the explosion of interest in online gambling this year - headlined by the stock
market arrival of PartyGaming with a current value of GBP 5.52 billion.
Bid chatter has also revolved around Ladbrokes, with private equity firm CVC Capital
Partners understood to have hired bankers to advise it on a potential bid for
the bookmakers owned by hotels firm Hilton Group.
