Barry Diller, a billionaire and president of IAC, MGM Resort’s largest shareholder, expressed doubts about the ongoing deal with Entain. According to Mr. Diller’s statement to the Financial Times, he is skeptical that the US casino group will successfully take over the UK’s online gambling business, Entain.
He said that “it would be great if MGM could do this with Entain, but whether it happens or not, I am skeptical and if not, I am optimistic. I am absolutely sure that we will be in a leadership position whatever it is. ”
Part of MGM’s proposal are actions that Entain rejected. Should the UK online gambling company prefer a cash alternative, IAC is ready to back the additional proposal by investing $ 1 billion. Such a potential offering values the owner of the Ladbrokes and Coral brands at approximately £ 8bn.
Last year, Entain turned down a $ 10 billion offer. MGM’s latest attempt to take over the UK online gambling company was backed up with another $ 11 billion proposal, which was again rejected. Entain explained that such an offer undervalues the company.
Meanwhile, a important representative From one of Entain’s major shareholders, Standart Life Aberdeen, Wes McCoy backed the Entain board’s position on the deal saying they want to see “the proper value of the fact that Entain is so digitally strong in all of its jurisdictions.”
Barry Diller’s media empire
Mr. Barry Diller and his company IAC have a long history of buying and expanding online businesses. The company owns the Ask.com brand and The Daily Beast along with another 30 digital media brands.
MGM Resorts is another major investment for Mr. Diller’s IAC of approximately $ 1 billion to build a 12 percent stake. The president himself declared that it is a golden opportunity “to own a significant piece of a preeminent brand in a large category with great potential to move online.”
He noted that there is good logic behind combining MGM and the Entain brand. A possible future partnership between the two companies would combine two powerful players in the world of online gambling who would provide their customers with an online sports betting and casino experience. Mr. Diller even suggested that if another acquirer appears, there is a possible option for a joint venture. Some described such a suggestion as “a poisonous pill,” as it makes Entain a less attractive target for other potential prospects.
The reason is that a joint venture would prevent Entain from maintaining its stable position in the US market, which, according to the specialist, could become the largest market for legal online gambling.
In conclusion, Mr. Diller expressed his firm belief that whatever the outcome of the Entain agreement, the opportunities for MGM remain many.
Source: “Barry Diller ‘skeptical’ about MGM-Entain deal’s chances of success,” Financial Times, January 11, 2021