DraftKings has confirmed after weeks of speculation that it will not be pursuing a takeover of UK betting and gaming group Entain in the near future, emphasizing that it is “highly confident” in its own technology, product, and brand.
In late September, Entain had announced it had received an improved acquisition offer from DraftKings, reportedly worth in excess of US$20bn, after rejecting DraftKings’ first buyout offer.
Against an extended deadline to respond of November 16, DraftKings has now walked away from the potential merger for the time being, although the company retains the right to disregard its statement should it come to further agreement with the board of Entain, if a third party makes a firm bid, or if Entain announces a “whitewash” proposal or reverse takeover.
“After several discussions with Entain leadership, DraftKings has decided that it will not make a firm offer for Entain at this time,” said Jason Robins, CEO and Co-Founder of DraftKings and Chairman of the Board. “Based on our vertically-integrated technology stack, best-in-class product and technology capabilities and leading brand, we are highly confident in our ability to maintain a leadership position and achieve our long-term growth plans in the rapidly growing North America market.”
Meanwhile, Entain maintained its confidence in its ability to maintain growth and deliver value for its shareholders whil achieving its goal of trebling its total addressable market to US$160 billion. It noted opportunities including establishing leadership in the North American market via its BetMGM subsidiary – operated in cooperation with MGM Resorts – expanding in current and emerging regulated markets, extending its interactive entertainment experience such as esports betting offerings, and increasing customer acquisition and loyalty while reducing acquisition costs.
Indeed, the status of BetMGM presented a major thorn in the side of a potential buyout, as a potential new owner of Entain would not be able to operate the product without the permission of MGM Resorts.
“The Board strongly believes in the future prospects of Entain, underpinned by its leading market positions, world class management team and industry-leading proprietary technology,” added an Entain statement. “Entain has an outstanding track record of growth having delivered 23 consecutive quarters of double digit online NGR growth, representing a three-year CAGR of 19 per cent across 2021.”