Online gambling house Entain PLC (formerly GVC Holdings) confirmed early Monday that it had received an $ 11 billion offer from US casino giant MGM Resorts International, but rejected it saying the price was too low.
The move reflects a similar acquisition announced a few months ago when Entain’s British rival William Hill accepted a £ 2.9 billion offer from Caesars Entertainment, Inc.
Under MGM’s proposal, first reported by the Wall Street Journal on Sunday, the casino operator offered 0.6 shares for each Entain share, pricing the multi-brand gambling operator listed at FTSE 100 at 1,383 pence per share. The offering represented a 22% premium over Entain’s last close on December 31, 2020.
Entain rejected MGM’s offer, telling the casino operator that it believes that “significantly undervalues to the company and its prospects. “
MGM is understood to have submitted a $ 10 billion cash offer before Entain late last year, which the latter rejected.
MGM seeks to expand its business, as rival Caesars is working to close the acquisition of William Hill by the end of the first quarter of this year. Caesars recently obtained US antitrust clearance for the deal and now needs approval from gambling regulators in several states to finalize it.
MGM’s largest shareholder backs Entain acquisition
Entain said on Monday that it asked MGM to provide additional information on the strategic motives for the possible combination of the two online gambling companies, but noted that there can be no certainty that the US casino operator has been. make one new and higher offer.
Had it accepted MGM’s latest offer, Entain shareholders would have owned about 41.5% of the extended group.
Entain formed a $ 200 million joint venture with MGM in 2018, shortly after the US Supreme Court struck down a federal ban on sports betting to pave the way for legalization of the practice in more than two dozen states. The joint venture of the two companies, ROAR Digital, runs the BetMGM betting app. Last year, they increased their investment in the business to $ 450 million.
MGM’s offer to buy Entain has been backed by its largest shareholder, InterActiveCorp (IAC). The American media giant invested $ 1 billion earlier this year to boost MGM’s digital online gambling business and is understood to be willing to inject an additional $ 1 billion to fund Entain’s acquisition by from the casino operator.
Entain, which previously operated as GVC Holdings, recently completed its rebrand and it marked the beginning of a series of important changes within the organization. It said it would abandon all unregulated markets and will get 100% of its revenue from regulated territories by the end of 2023.
Before acquiring Ladbrokes Coral in 2018, Entain had predominantly operated in the online gambling space. Apart from a number of casino and digital betting brands, including bwin, partypoker, BetMGM, the company also owns a sizeable network of retail gambling shops across the UK.