Las Vegas, Nevada 2021-09-22 12:23:00 –
British betting firm Entain has confirmed a takeover bid of approximately $ 22.4 billion (£ 16.4 billion) from DraftKings as online gambling companies seek to break into physical betting sites.
Entain’s share price soared nearly 6% on the London Stock Exchange on Wednesday, and potential trading rumors more than doubled this year’s share price.
Entain’s portfolio of sports betting and gambling companies includes some of the UK’s most famous brands such as Ladbrokes and Coral. Formerly known as GVC, the company claims a license to operate in more than 20 countries.
The partnership between DraftKings and Entain faces many hurdles. In particular, it is a partnership between a UK company and MGM Resorts International, a leading US casino and entertainment operator.
MGM has made its own proposal to acquire all of Entain in search of access to online technology. The offer, worth about $ 11 billion, was rejected by Entain this year as inadequate.
The Las Vegas company was aware of the DraftKings bid late Tuesday and said it needed consent to deal with Entain because of a partnership with a company called BetMGM.
“MGM will work with Entain and DraftKings as needed to find an exclusive contract solution that meets the objectives of all parties,” the company said.
Sports gambling has exploded in the United States after the Supreme Court rejected a law banning it in 2018. And the pandemic overestimated online betting.
Casinos want access to proven online gambling technology. At the same time, online gambling sites are seeking to enter the physical space.
If DraftKings successfully bids for Entain, they will have access to a physical betting location operated by the UK company’s Coral and Ladbrokes divisions.
Still, DraftKings may be playing purely for BetMGM-managed online real estate, wrote Laura Hoi, a equity analyst at Hargreaves Slan’s Down.
“BetMGM seems to be a big part of why DraftKings is interested. This means offloading other parts of the business, such as Ladbrokes and Coral’s physical betting shop. Maybe, “Hoy wrote.
This has been done before by major US players like Caesars Entertainment, Hui said.
Entain said it had previously rejected an offer of 2,500 pence ($ 34.12) in cash and shares per share from DraftKings late Tuesday, with a new offer worth 2,800 pence ($ 38.21) in cash and shares per share. Said that it was a combination of.
Entain said the board would consider the revised proposal.
Kelvin Chan from London contributed to this report.
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