Shares in William Hill rose yesterday after online operator 888 and casino giant Rank signalled interest in a £3 billion three-way merger with the bookmaker.
William Hill shares spiked 5%, Rank dipped 0.5% and 888 rose about 3%.
Online operator 888 and casino giant Rank signalled their interest in a merger with William Hill over the weekend, with the firms adding yesterday: "The consortium sees significant industrial logic in the combination, through consolidation of their complementary online and land-based operations, delivery of substantial revenue and cost synergies and from the anticipated benefits of economies of scale which will accrue to all shareholders."
For its part, William Hill said it "would listen to and consider any proposal which might be forthcoming".
However, it added that 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."
Just last week, William Hill chief executive James Henderson stepped down after the firm was hit by profit warnings and sliding sales under his tenure. It came after the bookmaker announced in May that net revenues tumbled 3% and online sales fell 11% in the first quarter as the firm took a hit from punters cashing in on bets on Cheltenham and the European football.
William Hill itself failed in a bid to buy 888 in 2015 after failing to agree an offer price with a major shareholder.
888 and Rank have until August 21 to formally announce their intention to make an offer for William Hill.
ends
Jason Holden at Liberum said: "Today's news reflects just how far William Hill has fallen of late given it was only last year that it was attempting a takeover of 888 itself. There's no doubt that William Hill is vulnerable at the moment given not only the CEO's departure but also following significant turnover in senior operational management and after the profit warning in March.
"Despite William Hill's recent woes the 888/Rank consortium would be acquiring the number two online and retail bookmaker in the UK with what is still a very strong brand and with a significant opportunity."
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