William Hill, the British bookmaker, has rejected an audacious consolidation attempt by two of its smaller rivals, dismissing a complex £3.6 billion bid from Rank Group and 888 Holdings as "highly opportunistic".

The UK high-street chain, which missed out on a feverish round of consolidation last year, said the 364p cash and stock offer “substantially undervalues” the company.

Shares in William Hill rose yesterday after the Financial Times reported that Rank and 888 had teamed up to submit the offer, which set out cost savings to lift the value of the proposal to 408p a share.

But William Hill’s board “unanimously rejected” the offer, saying it posed “substantial risk” for shareholders.

It said that the proposed takeover involved “a highly complicated three-way combination at a low premium”, with the merged company “assuming approximately £2.2bn of leverage” in order to fund the deal.

The chairman of William Hill, Gareth Davis, said: "This conditional proposal substantially undervalues William Hill, is highly opportunistic and does not reflect the inherent value of the business."

Rank and 888 declined to comment, but have previously said the takeover “presents significant industrial logic”.

The offer comes as other bookmakers have consolidated as they seek to build scale to help absorb the costs from tougher regulation and higher taxes. Betfair and Paddy Power completed a merger in March, while Ladbrokes and Gala Coral are also combining.