U.K bookmaker William Hill Plc recently announced that it has turned down an acquisition offer from Rank Group and 888 Holdings. The company was offered 3.2 billion in pound sterling, the equivalent of $4.2 billion in a cash and stock offer. If the offer had been accepted, it would have completed a major consolidation in UK’s online gaming and betting industry.

William Hill confirmed that they received an offer for 364 pence per share were 45 percent of total amount would be in the form of new company shares which would created to complete the acquisition. The offer wasn’t impressive as it represented a lower premium of around 16 percent less than the share price that the Rank Group and 888 Holdings were proposing to bid in July 2016.

William Hill Chairman Gareth Davis stated that the company wasn’t happy with the conditional proposal they received as it significantly undervalues the brand and was very opportunistic. Davis also stated that the proposal was very complicated and put the company’s shareholders in a lot of risk since the proposed merger would bring along with it a 2.2 billion pound sterling debt, which was necessary to fund the cash part of the acquisition. William Hill has continued to face a lot of pressure in the online betting industry as the competition in the industry is fierce.

The company sacked James Henderson, its chief executive officer in July 2016 as its growth had slowed down significantly. One of the reasons for the slowdown was due to the launch of a new sports betting platform and mobile application in 2015 which did not perform as well as expected. When news of a possible bid surfaced in July 2016, share prices of William Hill rose by 7.3 percent.

Alistair Ross, an Investec analyst in London feels that the Rank Group and 888 Holdings will most likely make a counter offer to William Hill but feels that the offer will still be below expectations as the companies do not have the financial resources required to make an offer that William Hill would find appealing. Ross believes that the companies would have to pay around 400 pence per share in order to be able to close the deal but is not very confident that the acquisition will be completed as the companies do not have the clout or financial resources to close.

The Rank Group and 888 Holdings proposal offered William Hill 199 pence per share in cash and 0.725 shares in the new bidding company which would allow investors in William Hill to own 44.6 of the new company which would generate around 2.8 billion pounds per year.

William Hill currently operates sports books in over 100 locations in Nevada. Some of the properties where William Hill operates include the SLS Las Vegas, D Las Vegas, Silver Sevens, Binion’s and Downtown Grand. The Rank Group and 888 Holdings are yet to respond to William Hill’s rejection.