MGM Resorts one of the largest US casino operators have pitched a takeover deal for UK-based Entain, formerly GVC holdings in a bid to strengthen its presence in the online sports betting markets.
Offer Rejected
Entain who owns UK high street betting shops Ladbrokes Coral had received a bid of £8.09B but rejected the offer stating it significantly undervalues the business and future prospects.MGM has until the 1st February 2021 to submit a formal bid. Both companies are familiar with each other as they already have a US partnership after a ruling in 2018 made online sports betting legal. The MGM deal would see investors receive 0.6 shares per single share they own, a value of 1,383p.Shareholders in Entain would own 41.5% of MGM, and MGM’s biggest investor Barry Diller’s owner of media group IAC, gave full backing of the deal. MGM have confirmed they “indicated that a limited partial cash alternative would also be made available to Entain shareholders.” Diller famous for launching Fox television in the US indicated back in August that IAC’s experience would enhance the growth of MGM’s online gaming business.
UK and US Partnerships
After the sports betting legislation changed in the US the Supreme Court ruled foreign businesses must partner with US-based casinos in order to “cash in” on the changes.In September 2020, US-based Caesars Entertainment struck a deal worth 3.7 billion dollars to takeover UK based William Hill. The US is set to be the next big growth market in sports betting with transatlantic partnerships tapping into the expertise of the UK online sports betting markets.