GM Resorts International will not pursue a takeover of the UK gambling company Entain, owner of Ladbrokes and Coral, after having an initial £8.1 billion ($11 billion) proposal rejected earlier this month.
MGM had until 1 February to make a firm bid under UK takeover rules, after it emerged that the casino business had made a proposal to buy Entain, with which it already operates a US joint-venture called BetMGM. Entain said the offer "significantly" undervalued the company's shares and its prospects.
The US casino group said in a statement Tuesday that it would not make a firm offer for Entain, following "careful consideration" and "limited recent engagement." City rules on takeovers mean MGM must now wait six months before it can return with a new offer, The Guardian reports.
Shares in Entain surged 25% after the MGM offer was disclosed, indicating that investors believed a higher offer was coming, either from MGM or another competitor. Following the announcement on Tuesday, Entain's stock plunged 15% in London. MGM's shares rose 2.6%.
In addition, MGM said it remains committed to BetMGM, a sports betting and online gaming company that operates in more than a dozen US states. "We remain committed to working with Entain to ensure its strong momentum continues as it expects to be operational in 20 states by the end of 2021," MGM CEO Bill Hornbuckle said in a statement.
"We look forward to continuing to work closely with MGM to drive further success in the United States through the BetMGM joint venture,” Entain stated. "Entain has a clear growth and sustainability strategy, backed by leading technology, that it is confident will deliver significant value for stakeholders."
The announcement from MGM also comes days after Entain’s Chief Executive Officer Shay Segev decided to step down, after just seven months in the role. The announcement that he would leave Entain to lead a sports streaming platform was made just days after the MGM bid was rejected. The British company's next steps will have to involve hunting for new leadership.