888 Holdings plans to make a joint offer with Rank Group for the purchase of the British bookmaker giant.
In the past few years there has been a clear trend of huge mergers between online gambling companies. The Betfair/Paddy Power fusion created a mammoth company worth £5 billion while the merger of Gala Coral and Ladbrokes created a new company worth $3.4 billion.
The main reason for these mergers is the fact that the United Kingdom introduced new tax laws which tax gambling companies at a higher rate than before. The mergers reduce operational costs in the companies and makes their promotional efforts more effective.
In the past few days we have been hearing news about another potential merger, this time the parties involved are 888 Holdings, Rank Group and William Hill.
According to Bloomberg, 888poker owners 888 Holdings and Rank Group, the owners of Grosvenor Casinos and Mecca Bingo could make a bid for the purchase of William Hill, one of the biggest bookmakers in the United Kingdom.
According to an unnamed source which talked with Sunday Times, the offer could reach £3 billion (roughly $4 billion).
Even if they join forces, 888 Holdings and Rank Group are still smaller than William Hill (in fact in 2015 William Hill made an offer to buy 888 Holdings), but if the merger goes through, that could result in a huge new company valued at £5 billion.
William Hill has had a rough time in the past few years, they struggled to find their spot in the world of online bookmaking. As a result, the value of their shares has been steadily dropping since 2013 and last week James Henderson, the head of the company has resigned from his position, so a merger could prove beneficial to the company.
In accordance with the laws of the United Kingdom, 888 and Rank have to make an official offer until August 21, so we will find out quickly how serious the involved parties are regarding the merger.
After the news broke, William Hill shares went up 10%, as did 888 Holdings (+5%) and Rank (+5.4%) shares.
William Hill operates an online poker room in the iPoker network. The iPoker network is also home to Coral Poker which runs exclusive cash races for Rakerace.com every month. You can read more about Coral Poker and our VIP offers here.
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