ONLINE gambling company 888 yesterday said negotiations over its mooted £720m takeover by rival William Hill had ceased after a key stakeholder vetoed the deal.
888, which saw its stock surge 20 per cent last week after the talks were made public, said it had discussed a recommended offer from William Hill worth 200p plus a 3p dividend per share.
“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 the statement. Two trusts set up by Israeli millionaire Avi Shaked, one of 888’s founders, each hold 24.34 per cent stakes in the company, with one wanting an offer closer to 300p a share, according to the Times.
Analysts had said that Britain’s largest bookmaker William Hill was attracted to 888’s strong in-house technology, having always used third-party suppliers. Another mooted benefit was an enhanced exposure to international markets such as the US. On a macro level, increasing tax and regulatory costs across gambling’s primary established markets has seen big players look to online operations for faster growth and more customers.
Stock in 888, which also saw a planned takeover by Ladbrokes in 2011 collapse over pricing, sank 11 per cent in trading yesterday following the news. William Hill was trading up one per cent.
888 declined to comment further.
PROFILE: AVI SHAKED
OF THE four founders of online gambling firm 888, Avi Shaked is the most high-profile.
Earning a degree in chemical engineering from the prestigious Ben Gurion University in Beersheba, Shaked went on establish a himself as a successful businessman in the 1980s. He worked as representative for US telecoms firm MCI, before founding Virtual Holdings – later renamed 888 Holdings – in 1997 alongside his brother Aaron, and Ben-Yitzhak brothers, Shay and Ron.
The Shakeds sold £95m of their shares when the Gibraltar-based company listed on the London Stock Exchange in 2005. Aaron died in 2010, but Avi retains ownership of a substantial stake in 888 through two family trusts. In 2007, Shaked expanded into the food industry with son Eyal, investing in a chain coffees shops named Chitta Cafe. The pair opened up 130 cafes in China in the following years.
Alongside his business career, Shaked has always been overtly political. An outspoken advocate of peace between Palestine and Israel, Shaked ran for Israeli parliament twice under the banner “Proud Socialist Millionaire” but failed on both occasions.