Rank Group and 888 Holdings have walked away from a potential William Hill merger.
On Monday, William Hill (LON:WMH) rebuffed a revised bid of 394p, up from 364p. William Hill said the deal was over complex and the group wanted to continue with its strategy.
William Hill Chairman, Gareth Davis, said “the team has a clear plan to grow by diversifying digitally and internationally”.
The latest resistance from William Hill led to Rank Group (LON:RNK) and 888 (LON:888) pulling back from the pursuit of one of the UK’s leading betting brands.
The companies said they no longer intended “to make an offer for William Hill” and were “withdrawing their proposal for a possible combination of the three companies”.
The motivation for the merger was a potential £100 million in cost synergies.
The board of 888 expressed disappointment in William Hill not sharing their vision of “the combined business”. 888 CEO, Itai Frieberger, said he saw “compelling industrial logic” in joining forces with Rank and William Hill.
Sweeping Consolidation
The failure will come as a blow to the pair as they seek to join the wave of consolidation in the UK gaming industry. Following the merger of Betfair and Paddy Power, Ladbrokes and Coral announced a deal to be finalised soon.
William Hill, once a benchmark for online and mobile betting, has fallen behind peers in recent years. This weakness provided the opportunity for Rank and 888 to pounce with hopes of creating the UK’s largest gaming company.
Falling Profits
In its half year results, William Hill revealed a 16% percent decline in operating profit. Blame was attributed to poor Cheltenham Festival performance, which was only partially of set by a strong Euros.
Despite the disappointing start to the year, William Hill remain optimistic on full year results.
“We have had a good start to the second half of the year and the Board now expects operating profit1 for 2016 to be at the top end of the previously guided £260-280m range,” said Gareth Davis.