William Hill and Rank/888 basing calculations of new offer's value on different dates; Takeover Panel intervention may be necessary - reports
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William Hill [LON:WMH] yesterday (15 August) said the improved takeover offer or 394p per share from Rank Group [LON:RNK] and 888 Holdings [LON:888] valued the UK-based bookmaker at only 352p, The Times reported.
Rank and 888 calculated the value of their cash plus shares offer for William Hill based on 888’s share price on 5 August, the day preceding their initial offer. However, William Hill calculates its figure on the aggregate market capitalisations of all three companies on 22 July, which was immediately before speculation of 888 and Rank's joint offer was confirmed, the item noted.
The Takeover Panel could be asked to take action regarding the different methods of calculation, the item said, without citing a source for the information.
William Hill announced on Monday that it had rejected the second offer from 888 and Rank, saying the proposal relied on debt, risk and hope and that the new offer was substantially below its true value.
The revised offer values William Hill at GBP 3.42bn (EUR 3.93bn), compared to the GBP 3.16bn value of the initial offer, the item said.
Rank and 888 had maintained the same cash component from its offer last of 364p per shares but increased the number of shares offered, raising the bid's value to 394p, the report noted. The revised offer would give William Hill investors a 48.8% stake in the merged group, compared with a 44.7% stake under the terms of the initial offer, the article added.
William Hill’s share price closed 21.2p down at 312.5p in London on Monday, giving the company a market capitalisation of GBP 2.71bn.