Casino operator 888 saw its share prices increase by more than 20% this week after reports revealed a takeover bid from leading UK bookmaker William Hill.
The news announced by 888 comes just hours after it was speculated by media outlets that William Hill was involved in advanced talks with the operator over a potential takeover bid believed to be worth $1.14 billion, equal to €1.01 billion or £750 million.
It was suggested that the two companies had come to a provisional agreement over a deal priced at 210 pence per share. The increase in the value of 888 shares saw them rise to 175 pence per share, a rise of 21%.
On the other side of the takeover bid, shares in William Hill suffered a drop of 3.5% to 376.2 pence per share as rumours circulated regarding a potential takeover of 888 leaving shareholders uncertain about the long term success of any deal.
A statement from 888 read “The board of the company confirms that it received an approach regarding a possible offer for the company by William Hill. There can be no certainty, however, that any firm offer will be made.”
However, despite reports claiming the takeover deal has reached an agreement at a preliminary stage, sources within the industry state that the deal is still likely to fall through. The reason for this being that one of the founders of 888, the Israel-based Shaked family, are determined to only see a deal go ahead at a value of 300 pence per share. A takeover deal that had been provisionally agreed with bookmaker Ladbrokes in 2011 fell through due to similar reasons.
Any deal at that value would not only see William Hill forced to increase their bid by almost 50% but it would also mean the bookmaker would have their budget stretched to such a degree that it would need to seek capital to fund the deal.
Ever since tax and regulation laws changed at the end of 2014 in the UK, companies operating in that market have been keen to pursue faster growth and more customers. It remains uncertain whether or not William Hill will progress further with this deal, or if 888 will be interested in taking talks past a preliminary stage as both companies evaluate the pros and cons behind any potential takeover deal.
If William Hill did take over 888, it would see them bolster their slots portfolio, both firms currently offer a wide selection of mobile slots as well as a large pool on online slot games – many of which can be played at Gamingslots.