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15:19GMT 17Oct2008-William Hill falls; Morgan Stanley downgrades

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Shares in William Hill fall 14.7 percent as Morgan Stanley cuts its recommendation on the company to "equal-weight" from "overweight" as part of a note on UK and Irish bookmakers.

The broker cuts later year forecasts by 30 percent to reflect lower growth on the High Street and a 300 basis point increase in interest costs.

Morgan Stanley says that with such a tight credit market, it does not think that the company should be paying any dividends given that it may need to tap shareholders to deal with its 1 billion pound March 2010 refinancing.

"We still see value for longer-term investors, but think that the shares could remain cheap until the refinancing is completed, or credit conditions ease," says Morgan Stanley, which cuts its target price to 310 pence from 485.

William Hill is scheduled issue a trading update on October 23.

Reuters Messaging rm://tricia.wright.reuters.com@reuters.net

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