MGM Resorts International has confirmed that it has made a proposal for Entain, but admitted that “there is no certainty” that the deal will move forward.
It was announced on January 4 by Entain, formerly known as GVC Holdings, which operates Ladbrokes and Coral among other sports betting brands, that it had received a proposal from MGM.
The proposal has a value of $ 18.91 per share of Entain, valuing the operator at approximately $ 11 billion. Entain did not like the figures presented and says that the giant MGM “underestimated the company and its customers”.
MGM has already confirmed its assessment, stating that Entain’s shareholders would own 42% of the combined company and that a cash alternative could be made available to the operator’s shareholders.
The casino operator further suggested that the proposal and the reasons for a combination are “attractive”, believing that a merger would allow the two companies’ joint venture, BetMGM, to thrive in the United States market and position itself as a “global gambling company. “both online and in retail.
MGM also stressed that the merger would allow it to expand and diversify operations and offers and align them for future growth, as well as investments. The company has until February 1 to confirm its intention to present an official offer for Entain.
MGM’s offer was considered low
In contrast, Entain assessed MGM’s offer as low because it “undervalued” its business considerably. In the national territory, the English betting company owns the Sportingbet platform.
According to MoneyTimes, the two companies have had the joint venture since 2018 when they created an online bookmaker to explore the U.S. market. The purchase offer would still involve a premium of 22% compared to the last quote from Entain.
Entain’s shares grew 28% and reached a record high, leading the UK index. However, the deal would also raise questions about the continuity of Entain’s bookmakers in the UK, after Caesars said it could give up William Hill’s operations outside the US market.
MGM representatives have not responded to Entain’s comments on the offer so far.
