DraftKings, a US sports betting, gaming, and fantasy sports provider, has expressed interest in acquiring Entain, according to media sources.
A statement from the company’s board of directors revealed that a bid to buy the FTSE100 firm had been put up, adding that the buyout would involve a mix of the former’s stock and cash.
The group, on the other hand, maintained: 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.”
DraftKings has until 5 p.m. on October 19, 2021 to ‘announce a firm intention’ to make an offer for Entain, or state that it has no intention to make such an offer, as per Rule 2.7 of the City Code on Takeovers and Mergers.
Entain added: “This deadline will only be extended with the consent of the panel in accordance with rule 2.6(c) of the code. This announcement has been made without the consent of DraftKings.”
MGM Resorts International, which runs the BetMGM joint venture with Entain, has also responded, stating that it is “aware” of the offer.
A statement released by the operator on the matter said: “As a consequence, any transaction whereby Entain or its affiliates would own a competing business in the US would require MGM’s consent.
‘global gaming entertainment company’
“MGM’s priority is to ensure that BetMGM continues to capture the growing US online opportunity and realising 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.”
CNBC had previously claimed that DraftKings had launched a $20 billion buyout offer for the company, with the publication suggesting that the deal would be primarily made up of shares.
Following MGM’s failed merger attempts, this is the second time a US-based betting and gaming business has indicated interest in acquiring Entain in the last 12 months.
The American firm made an offer of 0.6 MGM shares for each Entain share in January of this year, indicating a value of 1,383 pence per share and a 22 percent premium to the company’s share price.
Rejection of offer
Entain, on the other hand, rejected the $11 billion offer, claiming that it “significantly undervalued the company’s future growth prospects.”
Despite this, Entain continues to be a North American positive story, with a 22 percent market share as the country’s second largest sports betting and igaming operator.
According to the corporation, BetMGM also performs well, producing $357 million in net gaming revenue in the first half of 2021.