888 Holdings and Rank Group have confirmed that they no longer intend to make an offer to acquire rival William Hill.
The bidders said that despite their belief in the inherent value of their proposal, it has not been possible to meaningfully engage with the board of William Hill.
"888 and Rank respect the William Hill board's position and, as such, after careful consideration each now confirms that they have withdrawn their interest and that they do not intend to make an offer for William Hill," the companies said in a statement late Thursday.
Their proposal on August 8th valued William Hill shares at 364 pence per share, before accounting for cost and revenue synergies. This was subsequently improved to 394 pence per share on August 14th.
However, William Hill quickly dismissed both proposals, describing them as "opportunistic" and undervaluing the William Hill business.
Commenting on the decision not to proceed with an offer, 888 chief executive Itai Frieberger said: "We are disappointed that the board of William Hill did not share our vision of the combined businesses. We believe that there was compelling industrial logic for the combination of these highly complementary businesses, which in our view would have brought scale, diversification, and strong revenue and cost synergies, from which all shareholders would have benefitted."
That sentiment was echoed by Rank chief executive Henry Birch. "We strongly believe that the transaction would have created significant value for all three sets of shareholders," he said. "We and 888 are grateful for the shareholder support we have received throughout this process."
The two companies added that they remain committed to enhancing returns to their shareholders through their respective focused strategic plans.
Responding to 888 and Rank's withdrawal, William Hill chairman Gareth Davis expressed his confidence in William Hill's strategy, which is focused on growth through digital and international diversification.
"We note the consortium's confirmation that it no longer intends to make an offer for William Hill," Davis commented. "We will continue to focus our efforts on our strategy to deliver value for shareholders. The team has a clear plan to grow by diversifying digitally and internationally and four priorities to get us there.
"We have had a good start to the second half of the year and the board now expects operating profit for 2016 to be at the top end of the previously guided £260-280m range."
He also noted that three of William Hill's four division are performing well, while the company continues to make good progress on its plan to improve online performance across mobile sportsbook, gaming and key customer journeys.