William Hill has received a joint merger offer from rival gambling companies 888 Holdings and casino operator Rank Group. The UK bookmaker said it would "listen to and consider" the bid.
"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," 888 and Rank were quoted as saying Reuters.
However, the two companies added that they have not yet formally approached the board of William Hill. "Accordingly, there can be no certainty that any transaction will ultimately take place, nor as to the terms on which any such transaction might be constituted," the companies said.
Under British takeover guidelines, Rank and 888 have to now make a formal offer by 21 August. They are expected to walk away from the deal, if they fail to do the same.
While the three-way deal would combine a leading UK online gambling firm, a leading casino and bingo hall operator in the UK and the country's biggest high street bookmaker. William Hill said that it was not sure if the merged entity could "deliver superior value". The bid comes just days after William Hill's chief executive, James Henderson, was sacked amid poor online performance that led to a series of profit warnings.
It also follows William Hill's failed bid to acquire 888 in 2015, which had offered £720m (€862.77m; $946.74m) to the online gambling firm, but the latter had rejected it saying it was too low. The current bid also comes at a time when the sector is seeing increased M&A activity.
While Irish bookmaker Paddy Power and London-based internet betting exchange, Betfair Group agreed to a merger in September 2015. Two other peers, Ladbrokes and Gala Coral also agreed to combine in a £2.3bn deal that would make it bigger than William Hill, which is currently the largest UK bookmaker on the basis of its outlet count, reports said.
William Hill, through its 2,370 outlets, allows betting on traditional horse and greyhound racing apart from gaming on machines. Its shares have declined 21% since the start of 2016, valuing the firm currently at around £2.7bn.