Playtech, a leading gambling technology provider, initiated a £700 million bid to acquire 888 Holdings, the owner of William Hill.
The FTSE 250 company proposed the acquisition at 156p per share in July, but it was rejected by 888 Holdings, citing undervaluation.
This revelation intensifies the challenges for Lord Jonathan Mendelsohn, the Chairman of 888 Holdings, who has been grappling with a significant decline in the company’s share price. Since rejecting Playtech’s bid, 888’s shares have plummeted to 70.6p, reducing the business’s value to slightly over £300 million.
Lord Mendelsohn, who assumed the role of Chairman in March 2021, has been unable to prevent the sharp decline in 888’s shares, which have fallen approximately 80% during his tenure. Despite appointing a new CEO, Per Widerström, in October, 888 Holdings was recently removed from the FTSE 250 index.
888 Holdings acquired William Hill for nearly £2 billion in 2022, adding to its portfolio that includes Scandinavian bookmaker Mr Green and a betting joint venture with Sports Illustrated. Playtech, known for its white-label gambling technology services, also owns the Italian betting brand Snai.
There are suggestions that Playtech could integrate 888’s brands with Snai and potentially spin off Playtech’s business-to-business operation as a separate entity, identifying potential savings of up to £170 million from the integration.
This development follows reports of early-stage merger discussions between Lord Mendelsohn and Jason Robins, founder of DraftKings, earlier this year. Both Playtech and DraftKings had reportedly explored takeover possibilities with the William Hill board in previous years.
The news coincides with the publication of details regarding a deferred prosecution agreement (DPA) related to alleged bribery at GVC’s Turkish operations, now known as Entain.
The DPA, requiring Entain to pay £585 million to settle the investigation, may shed light on the actions of Kenny Alexander, former CEO of GVC and a significant shareholder in 888 Holdings through FS Gaming.
The Gambling Commission terminated talks between FS Gaming and the 888 board to appoint Alexander as CEO, expressing concerns about his suitability in light of GVC’s Turkish situation. The Gambling Commission subsequently placed 888’s betting license “under review.”
888 Holdings and Playtech have declined to comment on the matter.