UK – DraftKings makes US$20bn bid for Entain

DraftKings

In a bid valued at US$20 billion, DraftKings has made an offer to buy UK-listed Entain.

Following the DraftKings approach, Entain’s stock rose 18%, as the move would give DraftKings access to Ladbrokes and bwin’s online betting brands.

This is the second time this year that a competitor has attempted to buy the company in order to consolidate the fast-growing US market. Entain, which owns brands like Coral, PartyPoker, and Sportingbet, turned down an $11 billion offer from MGM in January, claiming it undervalued the company. MGM is also expected to make a new offer because it has accumulated more cash since its multibillion-dollar offer, according to analysts.

DraftKings has proposed a price of around £25 per share, representing a 30% premium over Entain’s Monday close, in a deal that will be financed primarily with DraftKings stock and a cash component.

“The offer nearly doubles MGM’s previous offer, which was rejected by shareholders earlier this year,” says Harry Barnick, Senior Analyst at Third Bridge. “Entain’s experience in online gambling, where it is the European leader in sports betting and online casino, makes it an appealing asset.”

“Draftkings’ bold bid demonstrates its willingness to compete with FanDuel, which is owned by Flutter.”

“As shareholders mull over the deal, three key questions remain,” added Barnick. “What will happen to the MGM partnership under DraftKings ownership? Could we see a counter offer lead to a bidding war? Then with the wave of consolidation, we are seeing in the market, including 888’s recent acquisition of William Hill’s international assets, investors’ will simply be wondering: which company could be targeted next?”

Entain and MGM already have a joint venture, BetMGM, that controls 20% of the market, compared to 15% for DraftKings. MGM must approve any deal in which Entain owns a competing business in the United States.

MGM said: “MGM Resorts International is aware of DraftKings’ possible offer for Entain. MGM is Entain’s exclusive partner in the US online sports betting and iGaming market through our highly successful 50/50 joint venture BetMGM. As a consequence, any transaction whereby Entain or its affiliates would own a competing business in the US would require MGM’s consent. MGM’s priority is to ensure that BetMGM continues to capture the growing US online opportunity and realizing MGM’s vision of becoming a premier global gaming entertainment company. MGM believes that having control of the BetMGM joint venture is an important step towards achieving its strategic objectives.MGM will engage with Entain and DraftKings, as appropriate, to find a solution to the exclusivity arrangements which meets all parties’ objectives.”

Categories:

Tags:

Share:

Facebook
Twitter
LinkedIn
Email
Nassima Azmzm

Nassima Azmzm

Leave a Comment

0 responses on "UK – DraftKings makes US$20bn bid for Entain"

Leave a Message



Qasiknow.com is born out of the necessity of sharing information and knowledge with everyone in the gaming industry who is interested in learning, growing, discovering different points of view and ways of doing things.

Upcoming Events

top
Copyright ©️ Qasiknow.com | All rights reserved.
X