Amid company challenges

William Hill owner 888 Holdings reportedly rejected a $883 million Playtech takeover bid

Reading time 1:48 min

Gambling software firm Playtech made an unsuccessful attempt to acquire 888 Holdings, owner of betting giant William Hill, in July, according to a The Sunday Times report. The offer put forth by Playtech amounted to 156p per share, valuing the total bid at £700 million ($883 million).

888 Holdings declined Playtech's acquisition proposal on the grounds that the deal undervalued the firm, as per the report, a decision that has raised questions amid the company's recent challenges and could heap fresh pressure on the betting firm’s board. Shares have fallen to 70.6p, which values the business at little more than £300 million ($378.8 million).

The acquisition of William Hill by 888 in July 2022, less than a year after reaching its stock price all-time high, has not shielded 888 from a decline in revenues. Q3 2023 results indicate a 10% fall in revenue compared to the same period last year.

Despite appointing a new CEO in July, following the departure of Itai Pazner in January, and addressing issues related to anti-money laundering failings in the Middle East, 888 Holdings has faced difficulties.

Details of the attempted acquisition came to light as part of a deferred prosecution agreement (DPA) related to bribery allegations involving a Turkish operation owned by Entain, at the time known as GVC. The DPA's implications extend to 888 due to the involvement of former GVC Chief Executive Kenny Alexander, now a notable shareholder in 888.

Since rejecting Playtech's offer, 888's shares have experienced a decline, adding pressure on Lord Mendelsohn, the board chair of 888. The company was also reportedly in early-stage discussions about a potential merger with DraftKings, which did not materialize.

Despite the financial challenges faced by 888, it remains uncertain whether Playtech would have provided an ideal solution for the company's revitalization. Playtech itself has encountered declines in recent years, with previous acquisition attempts, such as one by Aristocrat last year, proving unsuccessful.

A proposed merger with Aristocrat in October 2021, valued at $2.65 billion (£2.1 billion), was declined when only 56% of Playtech shareholders supported the move, falling short of the required 75% backing for the merger to proceed.

The rejection of Playtech's offer by 888 Holdings raises questions about the future direction of the company. The firm has recently faced regulatory fines in the UK, with a record £19.2 million ($24.22 million) fine in May and an additional £9.2 million ($11.60 million) penalty in the following month.

Furthermore, 888 Holdings has warned of a potential impact on its earnings for the third quarter, expecting a decline of up to 10%. As of now, representatives from 888 Holdings and Playtech have not provided comments on the reported takeover offer.

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