DraftKings makes $20 billion takeover bid for UK's sports betting firm Entain - CNBC
By Arghyadeep on Sep 22, 2021 | 03:32 AM IST
DraftKings has proposed roughly 2,500 pence per share, the report said, representing a premium of about 30% as of London Stock Exchange-listed Entain’s Monday close.
Before the news of the deal, the enterprise value of Entain was about £13.2 billion, or $18 billion, as of Monday.
The takeover deal will be largely in DraftKings stock along with a cash component, CNBC reported.
Later, In a regulatory filing with the LSE, Entain’s board confirmed the takeover proposal from DraftKings, even as it did not disclose any information on the price of the offer.
“A further announcement will be made as and when appropriate,” Entain said in the filing. “Shareholders are urged to take no action at this time.”
Entain’s shares jumped about 27% in LSE, and the Nasdaq-listed DraftKings fell nearly 10% after the news.
The deal will give the U.S. betting firm access to online betting brands like Ladbrokes Poker and Bwin.
The takeover proposal came after the British betting company had rejected an all-stock offer from U.S.-based MGM Resorts International in January, worth around $11 billion, saying it undervalued the company.
Entain and MGM already have an online sports betting joint venture called BetMGM to bet on NFL and NBA games.
The joint venture controls about 21% of the U.S. market compared to DraftKings’ 17%, Reuters reported citing RBC Capital Markets.
Although MGM is not currently involved in the latest takeover bid for Entain, Entain will require MGM’s consent for any deal involving the U.S. assets of Entain, MGM said on Tuesday in response to DraftKings’ approach.
MGM, in a statement, said it “will engage with Entain and DraftKings, as appropriate, to find a solution to the exclusivity arrangements which meets all parties’ objectives.”
The deal frenzy in the online gambling space comes at a time when regional operators are looking to expand and capture opportunities in states across the United States opening up to sports betting, as the demand shot up during the pandemic.
Last month, DraftKings, which went public via a SPAC merger in 2020, has bought rival Golden Nugget Online Gaming Inc in a $1.56 billion all-stock deal.
Entain said DraftKings has time till October 19 to make a firm offer for the acquisition.
Picture Credit: CNBC