888 shares tumble after spurning William Hill

Even Valentine's Day failed to persuade 888 to accept William Hill's proposal.

by Rachel Savage
Last Updated: 16 Feb 2015

It’s Monday after Valentine’s Day and love is no longer in the air for 888 Holdings. The betting site’s shares fell faster than the hopes of a spurned lover this morning, after it rejected William Hill’s £720m offer.

‘Due to a significant difference of opinion on value with a key stakeholder, it has not been possible to reach agreement on the terms of a possible offer and the Board of the Company has agreed with William Hill to terminate discussions,’ 888 said in a stock market statement bereft of any emotion about the failed union.

Its shares fell as much as 16% to 141.5p, before recovering somewhat to 147p in mid-morning trading. That’s still above the 145p it was trading at before it revealed the fellow bookmaker had proposed, but fickle investors were quite clearly in it for the 203p-a-share offer. William Hill’s shares, on the other hand, rose almost 1% to 385.8p.

What of that ‘key stakeholder’ then? 888 was founded in 1997 by two pairs of Israeli brothers, the Shakeds and the Ben-Yitzhaks, who together still control around 60% of the business. The Shakeds, who own 48.6%, are likely to have put the spanner in the works, according to Cenkos Securities analyst Simon French.

‘We are not surprised at this outcome given previous attempts to acquire 888 have ended in disappointment,’ he said. The brothers are reportedly holding out for 300p a share. That’s almost double 888’s current market capitalisation, so the company will probably stay a wallflower for the foreseeable future.

But William Hill, which suffered from ‘weaker sporting results’ (i.e. punters winning big) recently, is still ready to mingle, according to French, who expects it ‘to continue to explore M&A in the sector over the coming 12 months’. No doubt it’ll be looking for a more easily-persuaded partner.

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