And they are off.
Shares in William Hill, Rank Group and 888 are off to a flying starting this morning after William Hill confirmed it had received a “highly preliminary” approach from its two rivals regarding a potential merger of the three companies.
William Hill shares have jumped more than 11 per cent, Rank is up over 5 per cent and 888 Holdings has gained 3 per cent shortly after the opening bell in London.
William Hill, which has just parted ways with its chief executive, said it would listen to, and consider any proposal, which might be forthcoming from the consortium. But it added:
However, it is not clear that a combination of William Hill with 888 and Rank will enhance William Hill’s strategic positioning or deliver superior value to William Hill’s strategy which is focused on increasing the group’s diversification by growing its digital and international businesses.
Today’s statement from William Hill did not contain any detail on price but Simon French, analyst at Cenkos Securities, suggested any successful offer for William Hill “would have to be pitched at well over 400p per share”. The shares are up 11.9 per cent at publication time to 351p.
Mr French added, however, that is is “not immediately apparent that the skill set of 888 and Rank is suited to turning around either an online sportsbook or a retail division about to be leapfrogged by Ladbrokes/Coral”.
As such William Hill shareholders are likely to be cautious about the merits of any deal.
Read more on the potential combination from the FT’s Murad Ahmed here.