Huge sports and casino fan
Huge sports and casino fan
Boston-based DFS turned sports betting operator DraftKings is the latest company to court UK’s Entain Plc.
On Tuesday, the London-listed online and retail gambling giant confirmed that it had received a cash and stock takeover offer from its rival from across the pond, DraftKings Sportsbook.
‘’The Board of Entain confirms that it has received a proposal from DraftKings to acquire Entain, the consideration for which would include a combination of DraftKings stock and cash,’’ said the company.
According to details released by Entain, DraftKings has offered to pay £28.00 (2800 pence) per Entain share - £6.30 in cash and the balance in Class A common shares. The company further revealed that it had rejected an earlier bid by DraftKings, in which the US-based operator had proposed to acquire the firm in an all-stock transaction worth 2500 pence or £25.00 per share.
The latest proposal by DraftKings, which values Entain at 46.2% to its closing share price on Monday, saw the company’s stock rise by more than 20%, reaching an all-time high trading price of £24.00 on the London Stock Exchange on Tuesday.
DraftKings has until Oct. 19 to make the offer formal, as per the UK takeover law, but Entain has cautioned that a firm offer may not materialize.
DraftKings Sportsbook has made a series of big moves in the industry this year, as the company seeks to cement its position as a leader in the nascent US online gambling and sports betting market.
Just last month, DraftKings announced that it would be acquiring Golden Nugget Online Gaming (GNOG) in the bid to bolster its market share in the American iGaming space.
The company’s interest in Entain, therefore, does not come as a surprise seeing that Entain co-owns the BetMGM sports betting brand, which is estimated to control about 21% of the US mobile wagering market. If the deal is successful, the DraftKings-Entain partnership could see the Boston-based operator ramp up its market share to close to 40%, putting it in a better position to compete with rival FanDuel.
FanDuel, which was acquired by Irish bookmaking holding company Flutter Entertainment last year, is the largest operator in the US bookmaking industry currently with an estimated market share of 45% to 50%.
There is no doubt that DraftKings is also looking to tap into Entain’s expertise and vast experience in online gaming and bookmaking with its bid. Entain is known for its iconic sports betting and online casino brands like Coral, Ladbrokes, Bwin, Gala, Sportingbet, Partycasino, and the US-facing BetMGM.
Following the Tuesday announcement, Entain’s joint venture partner in the US, MGM Resorts International, has issued a statement saying that Entain would require its consent before accepting any deal that would see it run a competing business in the American betting market. MGM Resorts International and Entain co-own the BetMGM Sportsbook brand.
‘’Any transaction whereby Entain or its affiliates would own a competing business in the US would require MGM’s consent,’’ said MGM in a statement.
The company went on to emphasize that its priority is to make sure that the BetMGM brand continues to expand in the US market as it works on its vision of becoming a leader in the global gaming entertainment scene. The firm added that gaining control over its joint venture with Entain is crucial in its expansion plan.
‘’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,’’ added MGM.
‘’MGM believes that having control of the BetMGM joint venture is an important step towards achieving its strategic objectives.’’
The Las Vegas-based firm concluded by saying that it was open to talks with both Entain and DraftKings, and that it hoped the engagements would result in a solution that would favor all parties.
Early this year, MGM Resorts had proposed to acquire Entain in an all-stock deal valued at $11 billion, but the UK operator turned down the bid, saying that it seriously undervalued its operations.