Rank and 888 make USD 4.67B bid for William Hill

It is thought that the two suitors have made an ambitious joint cash-and-stock proposal for William Hill worth about 364p-a-share. The proposal, which it is understood would also see the combined business take on a considerable amount of debt, also outlines synergies that Rank and 888 have argued push the value of the deal up to approximately 408p-a-share.

William Hill’s board, led by chairman Gareth Davis, is expected to convene to consider the bid and a formal response is expected later. Simon French, an analyst at Cenkos Securities, last month said that “any successful offer for William Hill would have to be pitched at well over 400p-per-share”.

As well as the price, the debt that Rank and 888 plan to saddle the business with is likely to be a factor in the board's decision. All the parties declined to comment.

It emerged a fortnight ago that Rank, which also runs Mecca bingo halls, and 888 were eyeing a consortium approach for William Hill, which would entail a complex three-way deal. The bookie at the time gave a tepid response to the pair, warning that it was “not clear” that a tie-up with Rank and 888 would “enhance” its “strategic position or deliver superior value”.

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William Hill has been left vulnerable after its board last month ousted James Henderson, chief executive for just two years, because of his failure to revive the bookie’s struggling online business

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Mr Henderson had presided over a number of profit warnings that have resulted in William Hill's shares falling as low as 246.9p in July, from a peak of 494.5p three years ago. The stock, which has been boosted recently by hopes of a bid, rose 5.2p to 332.6p.

A takeover of William Hill would be the latest in a spate deals in the British gambling sector, driven by tighter regulation and higher taxes. To achieve greater scale to absorb those pressures, Ladbrokes is merging with Coral and Paddy Power has combined with Betfair.

The Financial Times first reported that Rank and 888 had submitted a bid.