The proprietor of the massive betting company William Hill, 888 Holdings, was up for takeover by the gaming software company Playtech back in July, which was an unexpected turn of events. Rejected on the basis that it undervalued the firm, 888 Holdings turned down the £700 million ($883 million) offer at 156p per share.
Given that the business has been facing difficulties, 888 Holdings’ decision to reject the acquisition comes at a crucial time. In Q3 2023, 888 Holdings reported a 10% decrease in sales compared to the same time the previous year, despite the company’s July 2022 acquisition of William Hill. Now worth little over £300 million ($378.8 million), shares have slumped to 70.6p.
Playtech and 888 Holdings
In a deferred prosecution agreement (DPA) connected to bribery charges with an Entain-owned Turkish operation, details of the abortive purchase effort surfaced (previously GVC). 888 Holdings was also affected by the DPA because of the participation of former chief executive of GVC Kenny Alexander, who is currently a significant stakeholder in 888.
There are doubts about whether Playtech would have been the best choice for 888 Holdings’ revival in light of its previous difficulties, which have included falls and botched merger efforts. The firm itself had to deal with the rejection of planned October 2021 merger with Aristocrat since only 56% of Playtech shareholders approved of the move—far less than the necessary 75%.
888 Holdings is under further pressure as a result of Playtech’s bid being rejected, particularly for Lord Mendelsohn, the company’s board chair. The future of the firm is further clouded by recent regulatory fines in the UK, including a record £19.2 million ($24.22 million) violation in May and an extra £9.2 million ($11.60 million) penalty. Additionally, the company has been warned that its profitability might decrease by up to 10% in Q3.
888 Holdings and Playtech representatives have not commented on the alleged buyout bid, which has industry watchers wondering how it would affect both companies’ future directions.
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