London-listed betting and gaming operator Entain has confirmed it has received an improved acquisition offer from DraftKings.
A report from CNBC has suggested the offer is in excess of US$20bn but Entain’s board said in a statement only that the consideration would include a combination of DraftKings stock and cash.
Entain confirmed it had rejected DraftKings’ first buyout offer of £25 per share, which was then followed up with a revised offer of £28 per share. Entain has said it will “carefully consider” the offer and urged shareholders to “take no action at this time”.
A company statement read: “The board of Entain strongly believes in the future prospects of the company underpinned by its leading market positions, world class management team and industry-leading technology. The company has a strong track record of growth and runway for further significant growth as set out in the capital markets day on 12 August, with the potential for its total addressable market to grow by more than three times to US$160bn. This includes its leadership position in the rapidly growing North American market through its Joint Venture BetMGM. Entain has the most diversified and regulated revenues of any of the global operators and leads the industry in player protection through its Advanced Responsibility and Care programme.”
Under the City Code on Takeovers and Mergers rules, DraftKings must declare a firm intention to make an offer for Entain by October 19.
MGM Resorts, which owns the BetMGM U.S. joint venture with Entain, said it was aware of DraftKings’ possible offer for Entain. “Any transaction whereby Entain or its affiliates would own a competing business in the U.S. would require MGM’s consent,” said MGM Resorts in its own statement. “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.”
MGM had made its own offer to acquire Entain in January of this year with an offer of £8bn (US$11bn), a proposition which was rejected by Entain’s chairman Barry Gibson as “significantly undervaluing” the group, as reported by SBC News. MGM subsequently confirmed that it would make no further offers.
Entain continues to enjoy North American success, having established itself as the U.S.’s second biggest sports-betting and iGaming operator with 22 per cent market share, per SBC Americas.
Meanwhile, BetMGM is currently the No. 1 iGaming operator and a top-three sports betting operator in the U.S. according to CDC Gaming Reports.