Months after Entain rebuffed MGM’s $11 billion acquisition bid, DraftKings has stepped up and doubled up the offer to $22.4 billion. However, MGM still poses a threat to the deal it has to give consent before DraftKings’ proposal is set in stone.
On Wednesday, Boston-based sports betting, and daily fantasy sports operator DraftKings, proposed a $22.4 billion bid to take over rival sports betting and gambling group Entain. This buyout figure is double the rejected $11 billion attempt MGM had made to acquire Entain back in January. Then, Las Vegas-based MGM Resorts International had offered 0.6 MGM shares for each Entain share, whereas DraftKings bid for the same company is 28 pounds per share in cash and stock.
Entain, which currently operates renowned gaming brands including Ladbrokes, Coral, Bwin, SportingBet, and PartyPoker, confirmed the buyout effort from its rival. Still, the company’s board has said that it ‘will carefully consider the proposal’ given that the acquisition offer is not a done deal yet. The board of Malta-based Entain has insisted, “There can be no certainty that any offer will be made for the company, nor as to the terms on which any such offer may be made.”
According to the City Code on Takeovers and Mergers, Rule 2.7, DraftKings has until 5:00 pm on October 19th, 2021, to declare a ‘firm intention’ of making an acquisition offer for Entain or confirm that it won’t be following through with the buyout intention. Entain further announced that according to Rule 2.6 (c) of the City Code on Takeovers and Mergers, the deadline could only be extended with the consent from DraftKings’ panel.
MGM Resorts International Still a Key Element of the DraftKings Buyout Bid
Interestingly, before DraftKings can complete its purchase of Entain – should the company choose to carry on with it, MGM still has a say on the transaction. That’s because Entain and MGM Resorts International co-own BetMGM 50/50. When the two gaming companies penned their joint venture in July 2018, it included an agreement that gave MGM the power to block any business contract with a competing company, such as DraftKings in this case.
On that matter, MGM had even previously released an official statement on Tuesday to say:
Quote“As a consequence, any transaction whereby Entain or its affiliates would own a competing business in the US would require MGM’s consent. MGM will engage with Entain and DraftKings, as appropriate, to find a solution to the exclusivity arrangements which meets all parties’ objectives.”
So, until DraftKings formally confirms that it will move forward with its mission to take over Entain, there’s no saying how the situation will unfold.
USA’s iGaming and Sports Betting Market is Getting Hotter
Meanwhile, MGM has been homing in on the North American market, where its BetMGM joint venture with Entain continues to enjoy tremendous success. As we speak, BetMGM is the third-largest sports-betting and iGaming operator in the region with a market share of 22%, behind Flutter’s FanDuel and DraftKings. Moreover, the BetMGM project has been generating substantial profits for the duo, with recent earnings statements reporting that the brand won $357 million in net gaming revenue for H1 2021.
On Tuesday, MGM Resorts International also went ahead and reiterated its focus on the US online gaming and sports betting market by saying:
Quote“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.”
Since the US Supreme Court repealed the PASPA in May 2018, MGM has not been the only operator with an eye for rapid expansion in the US gaming market. In September 2020, Caesars Entertainment acquired William Hill for $3.7 billion, intending to cement its command of the USA’s burgeoning iGaming and online sports betting business. True to its intentions, Caesars is already selling off its William Hill International assets to 888 Holdings for over £2 billion.
DraftKings, on the other hand, is on a buying spree for a more significant share of the US iGaming and sports betting market. The Entail pursuit aside, the company is in advanced talk to acquire Tilman Fertitta’s Golden Nugget Online Gaming for $1.56 billion. Additionally, Disney-owned ESPN has recently been mauling over licensing its brand to DraftKings and Caesars Entertainment in a multi-year arrangement estimated to be worth over $3 billion.
Looking for a fresh take on crash games? We explore engaging crash and tap games with entertaining themes inspired by pop culture and classic gaming.
Learn how crypto beginners can bet safely using stablecoins like USDT and USDC. Skip market volatility and explore 4 top-rated online casinos offering fast, reliable stablecoin deposits today.
Join us for a chat with Wiktoria Hanak of BF Games to understand how the provider decides which games to make and learn more about the mathematical model and bonus feature selection process.
Casinos
Games
Jackpots
