New attempt

MGM reportedly considering Entain takeover bid after publication of UK gambling review

2023-01-23
Reading time 1:38 min

American casino giant MGM Resorts is reportedly considering a new takeover bid for sports betting heavyweight Entain, according to latest reports. Industry sources told CTFN that a takeover proposal could come after the long-delayed publication of a white paper on gambling in the UK, which is now expected around March.

Additionally, a recent report released by financial services provider Deutsche Bank suggests that a merger between both companies is not only possible but even represents a “fairly obvious” combination. According to analysts, a combination would likely receive the support of shareholders from both entities.

MGM is currently valued at almost $15 billion, with a significant presence in the US market and gambling mecca Las Vegas. For its part, Entain is currently worth about $11 billion. Two years ago, MGM offered $10 billion to take over Entain – its joint venture partner in US-facing brand BetMGM – but the bid was turned down as the sports betting giant considered the price tag not high enough.

In addition to turning down MGM’s all-stock takeover bid in January of 2021, Entain also rejected a cash and stock offer from US sports betting heavyweight DraftKings in September of that same year. But analysts suggest MGM might try once again after the UK government publishes the review of its Gambling Act.

Publication of the white paper on the gambling review, which was expected last year, may provide clarity for Entain and the new gaming landscape it will encounter. It is believed the Gambling Act whitepaper may introduce strict measures to gambling and include guidelines on how the UKGC regulates companies with overseas exposure, which is why MGM could be opting for caution and waiting before submitting another takeover bid.

Acquisition of Entain would provide MGM full control of BetMGM in their joint venture. BetMGM the largest internet casino operator in the US and one of the dominant providers of sports wagering services, and is currently nearing profitability, underscoring MGM’s desire to gain full control of the internet gaming entity.

Entain is one of the largest British gambling websites. While many US customers may not be currently familiar with the brand, they are likely to recognise some of the companies owned by the giant, including Party Poker, Ladbrokes, Sportingbet, and Bwin. Shares of the Ladbrokes owner rallied in London and gained almost 4% in US trading following CTFN’s report about the potential resumption of takeover talks.

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