MGM Drops Takeover Plans For Entain After Rejected $11bn Proposal

Spread the Word:

MGM Resorts International will not pursue a takeover of Entain after the UK-based gambling company rejected two recent bids.

In Tuesday’s announcement, Las Vegas-based casino giant said it no longer intends to submit a revised proposal, nor will it make a firm offer for Entain Plc. “After careful consideration on the limited recent engagement between the …companies regarding MGM’s reject all-stock proposal… it (MGM) does not intend to submit a revised proposal, and it will not make a firm offer for Entain.” The British company’s shares sank 16% in London following the announcement.

Entain, the owner of Ladbrokes and Coral, had rejected an initial $11 billion takeover proposal earlier this month. Under UK regulations, MGM had until February to make a firm bid after it was confirmed that the company had made a proposal to acquire Entain, with which it already operates a joint-venture in the US. Immediately following MGM’s $11 billion bid, Entain said the offer “significantly” undervalued the British company. Under City rules on the takeover, MGM cannot make a new offer until six months from now.

How Have We Reached Here?

In 2018, MGM Resorts International and GVC Holdings PLC – which rebranded to Entain in November last year – announced a 50/50 joint venture to create an online sports betting platform in the US. The platform that the two entities co-parent is BetMGM, one of the leading digital sports betting companies in the US.

Considering the ever-increasing potential, MGM sought to reap the maximum benefits from a flourishing sports betting industry by following a recent example from Caesars Entertainment, which took over another British bookmaker, William Hill. However, Entain rejected two takeover offers from its American partner. The last one, which was worth roughly around $11 billion, valued the British company at 1,383 pence per share, equaling a 22% premium to the share price by the close of 2020. Still, experts predicted another offer forthcoming, and it evidently came from MGM’s largest shareholder InterActive Corp (IAC), which offered another $1 billion to help get the deal done.

The casino company did not elaborate on the reasons for its recently announced U-turn. However, some believe the recent departure of Entain CEO Shay Segev, who remained in office for a brief period of five months, may have played a role.

The Future of BetMGM

Following MGM’s initial offer for the British company, Entain shares surged 25%. This suggested that a higher offer was coming, if not from MGM, then from another potent rival company. However, following the most recent announcement, Entain’s stock dipped 15% in London, while MGM’s rose 2.6%.

The attention now diverts to the joint venture, BetMGM, which could be threatened following the failed talks between the two entities. While terming BetMGM as a “key priority,” MGM CEO Bill Hornbuckle said, “We believe BetMGM has established itself as a top-three leader in its market, and MGM remains committed to working with Entain to ensure its momentum continues.” Hornbuckle said the BetMGM, which currently operates in more than a dozen states, will be operational in as many as 20 states by the end of this year.

In a separate statement, Entain also dismissed any concerns regarding the joint venture. The British company said it looked forward to continuing to work closely with its American partner to push further success in the US via the BetMGM joint venture.

Can MGM Try Again?

Following a six-month cooling-off period imposed by City rules, MGM can try another attempt at converting its 50/50 BetMGM joint venture with Entain into full ownership.

The US casino operator is particularly interested in utilizing Entain’s technology and sports betting expertise to capitalize on the rapidly growing sports betting in the US, following the Supreme Court’s 2018 PASPA decision that had banned the industry outside of Nevada for decades.

MGM attempted to acquire Entain earlier this month after its US rival Caesars acquired William Hill for $3.7 billion.

Related News

Massachusetts state house
January 11, 2021

Massachusetts Sports Betting Proposal Shelved Again

Massachusetts lawmakers concluded on Wednesday, January a $627 million bill that includes everything except for sports betting legalization. In the economic development bill, which included housing production incentives, vocational school […]

read more
Ladbrokes sign
January 13, 2021

MGM’s Largest Shareholder IAC Offers $1bn to Get Entain Deal Done

MGM’s largest shareholder, InterActiveCorp (IAC), has offered to invest another $1 billion in the company to help it acquire UK-based Entain PLC. Billionaire Barry Dillerowner, owner of the US media […]

read more
MGM sign
January 6, 2021

MGM Resorts Raises Offer For Entain Acquisition to $11 Billion

MGM Resorts International has made an $11 billion offer for UK-based Entain Plc in a recent wave of trans-Atlantic mergers after their earlier $10 billion all-cash offer was dismissed. However, […]

read more
WSOP tournament
April 8, 2021

World Series of Poker Unveils Plans for 2021

The World Series of Poker (WSOP) has announced the return of the live, in-person World Series of Poker event this fall, pending regulatory approvals. The announcement made on April 1 […]

read more
MA state house
November 22, 2020

Massachusetts Sports Betting Rejected Again by Senate

Massachusetts Senate has rejected sports betting the part of the 2021 budget in a move that will delay its regulation in the state. The huge step, though in the reverse […]

read more
Arizona sign
February 9, 2021

Arizona Lawmakers & Tribes Work Together on Sports Betting Proposal

Arizona lawmakers and tribes have come together to consider a pair of sports betting bills filed with Gov. Doug Ducey’s backing early last week. Under the proposal put forward Monday, […]

read more
October 22, 2020

Illinois Casino Revenue Drops 30% in 2020

Illinois casinos have reportedly seen a drastic revenue drop of 30% in 2020 compared to the last fiscal year. The sudden plunge in revenue over the past eight months was […]

read more
September 30, 2020

Nevada Revenue Drops As Other States Benefit from Online Gambling

Unlike other states that regulated and are now enjoying a decent revenue through online gambling, Nevada has remained largely empty-handed. So far the Silver State has only allowed online poker. […]

read more
Ladbrokes & Paddy Power store fronts
January 14, 2021

Entain CEO Suddenly Resigns Amid MGM Takeover Bid

Entain Plc said Monday its CEO Shay Segev would leave the company days after it rejected an $11 billion takeover bid from MGM International. Segev led the UK-based Entain, formerly […]

read more
Department of Hawaii Homelands
February 11, 2021

Hawaii House Committee Rejects Casino Proposal

State lawmakers voted Friday to kill a legislative proposal that would have allowed to build Hawaii’s first casino in Kapolei. The House Economic Development Committee rejected the request by the […]

read more
BetRivers kiosks
May 21, 2021

West Virginia Sports Betting Drops in April, With Signs of Recovery

West Virginia sports betting sank in April, falling 47.7% from March Madness-filled handle, with sports betting revenue also dipping 59.2% for the month. According to the report released by the […]

read more
MGM Grand Hotel & Casino
January 8, 2021

MGM Confirms Takeover Proposal to Acquire Entain

MGM has confirmed it made an offer to acquire Entain but added it could not confirm if it will make a firm bid to merge its British partner. The latest […]

read more

Stay Updated & Receive Exclusive Offers

Be the first to know when new states legalize online gambling and gain access to exclusive casino and sports betting promotional offers.