MGM Walks Away From Entain Takeover After Rejection
January 19, 2021
MGM has confirmed it will not be making a firm revised offer to buy UK gambling company Entain, two weeks after its c. C$14 billion proposed takeover bid was rejected by Entain's board.
Earlier this month, the Las Vegas-based casino operator offered 0.6 of its shares for each Entain share, worth £8.09 billion (US$10.99 billion). That was turned down by Entain (formerly GVC Holdings), which said the deal representing a 22% premium undervalued the company.
Following that rejection, Entain's CEO announced he was stepping down to move to sports broadaster DAZN.
Now, MGM says it will not be furthering its interest.
"After careful consideration and having reflected on the limited recent engagement between the respective companies regarding MGM’s rejected all stock proposal . . . [MGM] does not intend to submit a revised proposal," the company said on Tuesday.
MGM Resorts CEO Bill Hornbuckle explained: "BetMGM, our U.S. sports betting and online gaming venture with Entain, remains a key priority for the company as we continue to leverage our preeminent physical gaming, entertainment, and hospitality platform to expand digitally.
"We believe that BetMGM has established itself as a top three leader in its markets and we remain committed to working with Entain to ensure its strong momentum continues as it expects to be operational in 20 states by the end of 2021."
Entain said in its own statement: "We look forward to continuing to work closely with MGM to drive further success in the United States through the BetMGM joint venture."
The share price of Entain, which owns UK bookmakers Ladbrokes and Coral, fell sharply as a result of the news and was down 16 per cent in lunchtime trading in London.
MGM and Entain run a 50/50 split joint venture in the U.S. within the booming sports betting and online gaming market.
MGM said in Tuesday’s statement that it remains "committed to being a premier global omnichannel gaming and entertainment company, and will maintain a disciplined framework while evaluating a range of compelling strategic opportunities."
MGM's pursuit of Entain is thought to have been an effort to keep pace with their major rivals in the market. Caesars Entertainment is acquiring William Hill plc, while Flutter Entertainment has increased its stake in FanDuel.