William Hill takeover hopes hanging by a thread

Mecca Bingo owner Rank and online casinos firm 888 Holdings are unlikely to significantly raise their bid for struggling bookie William Hill, the Evening Standard understands, leaving hopes for a £5 billion three-way merger hanging by a thread.

The suitors, who plan to merge to swallow Hill, broke cover yesterday with a 364p cash-and-shares deal.

This gives Hills investors a 45% stake in an enlarged group, while identifying 44p in cost savings, taking the value of the bid to 408p.

Evening Standard understands that the bidders are unlikely to go beyond 416p a share, Hills’ 52-week share high, including the savings, which have been verified by a top-four accountant. The shares were down 2.9p to 326.1p today.

The bookie said the proposal “substantially undervalues” William Hill.

Concerns have also been raised over the £2.2 billion in debt needed to fund the cash element, “using our own balance sheet to buy us”, according to one source.

One Hills investor said any offer would have to “be pretty extreme” to tempt them into the complex transaction.