GFS.L Share News (GFS)

(ShareCast News) - While William Hill shares have been whipped higher by Rank and 888's preliminary takeover approach, Berenberg believes the bid will be unsuccessful and maintained its 'sell' rating on the bookmaker.Over the weekend, £800m-valued online specialist 888 Holdings and £900m land-based bingo and casino group Rank confirmed they had formed a consortium to formalise a bid for £2.7bn William Hill.Though the consortium have not set out a price, City rumours put the price at around £3bn for Hills' equity, roughly 360p a share, which would be a 15% upside on Friday's closing price and circa 20% above the average price of William Hill over the past three months.While, Berenberg sees the potential for around £65m of synergies from a merger, it also eyes "several uncertainties looming" that cast doubt on a successful deal.Firstly, the deal is complicated as it entails the merger of three relatively large operators and secondly, the structure of the deal is thought likely to be critical as William Hill's shareholders are likely to want a cash offer rather than a mix of cash and shares, which would require the bidders to raise £2bn of cash.The reason why a cash offer is preferred is that a cash-and-shares deal "would increase exposure of William Hill's shareholders to unregulated markets via 888 and to retail activities via Rank, neither of which are attractive".As it stands, analyst Roberta Ciaccia said he sees William Hill's current fundamentals as "weak", with poor earnings momentum and "a road to recovery longer than consensus currently expects"."We did not think William Hill could be a takeover target for any competitor given its size, and we certainly did not expect two players to form a bidding consortium. We think the stock will bounce today, but we also believe that the likelihood the deal actually goes through is not high."Ciaccia said he would take profit on any bounce of the share price, and maintained his standalone price target for WMH at 240p per share. Canaccord Genuity reiterated a 'buy' rating for Beazley and raised its target price to 450p from 415p after the insurer reported its half year results.The Lloyd's of London insurer last Friday reported a drop in first half pre-tax profit to $150.2m from $154.5m the same period a year ago, although the figure was above consensus forecasts for $143m.Gross written premiums increased 2% to $1.12bn and the company had a combined ratio of 90% versus 86% at 30 June 2015. The dividend was raised 6% to 3.5p.Canaccord said the "strong" first half was helped by gains on bonds and diversification in specialty lines."The around 5% pre-tax profit beat to consensus looks to have come from a very strong investment result, with underwriting profits in-line with our forecast on a 90% combined ratio, in-line with the long-run track record," said Canaccord analyst Ben Cohen."The 6% increase in the interim dividend was in-line with forecast, although the company cautioned that a higher proportion of growth from Specialty would increase the growth in capital required to double digit in coming years."Cohen added: "Beazley continues to look attractively valued versus US specialty peers on high teen multiples, and reasonable value against Lloyd's peers, with only 6% of its business covering UK domestic risks, for an attractive 5% yield (including Special)." RBC Capital Markets raised its rating on G4S to 'sector perform' from 'underperform' on Monday and reiterated a target price of 170p for the security giant.The analyst said G4S looks set to benefit from a weaker pound while demand for the security industry has increased following recent terrorist attacks in Europe. RBC also believes Brexit will not impact G4S from an operational perspective."We believe G4S should really be a 3-4% organic revenue growth company, with broadly stable margins and a high cash conversion," said analyst Andrew Brooke.The stock has suffered recently on balance sheet concerns as the group has a high level of debt along with a high current dividend payout, pension top-up payments and onerous contract cash costs. The drop in the pound following the UK's vote to leave the European Union on 24 June has also affected debt in euros and dollars. Given lower bond yields, the pension deficit is potentially higher. As a result the balance sheet position is likely to have deteriorated, RBC said."To get round this, we think management should bite the bullet and raise equity - we think £400m makes sense," Brooke said."This takes the pressure off disposals, gets the rating agencies off its back and gives management more flexibility."