On Monday, Entain PLC turned down an offer made by MGM Resort for $ 11 billion. The US casino giant continues its bid to take over the British house of online gambling, as the merger is very important to both companies.
Last year, Entain received a $ 10 billion offer, which it declined. MGM made the new offer last Monday and Entain representatives still refused to accept it.
The explanation was that the price, initially offered, was too low and that both offers significantly undervalued the company.
Entain left the door open for discussion, giving MGM an opportunity to find a way to make their offering more attractive by including a combination of stocks and cash. The Entain board asked MGM to provide an additional strategic foundation for the merger.
Meanwhile, shares in Entain, also the owner of the Bwin gambling site, have dropped to 1,403 pence, but the company is still waiting for a better offer. Casino investor Jason Ader expresses his confidence that the MGM resort will raise the price as he is the perfect buyer.
After a series of asset sales, the American giant has nearly $ 4.6 billion in cash and one of the largest shareholders, IAC / InterActiveCorp, is ready to invest even more in the company to close the deal with Entain PLC.
Entain and MGM have been in an exclusive relationship since 2018
The partnership between the two companies offers their customers an online casino and sports betting experience. The online gambling house is an Internet-centric business that grew significantly in recent years. Meanwhile, MGM is the largest casino operator in Las Vegas. The future deal will combine two powerful players in the world of online gambling.
The pre-existing relationship between Entain and MGM will allow the British gambling house to accept an offer from another bidder, giving the American giant a chance to undo the partnership.
According to the source, who prefers to remain anonymous, Entain’s address was and will not be a obstacle in the discussion of the merger. On the contrary, it can play an important role in the combined companies.
Entain recently began making significant changes within the company. Part of that is the acquisition of Ladbrokes Coral in 2018. As well as operating primarily in the online betting scene, the company owns a network of UK betting shops. Unlike what happened with a similar merger between US casino giant Caesars Entertainment Inc. and famous British sportsbook Willian Hill PLC, MGM has no interest in selling Ladbrokes sportsbooks.
Source: MGM Discusses Ways to Win Over Entain Investors with a Takeover Offer, Bloomberg LP, Jan 6, 2021