It is firm. No offer is forthcoming from MGM Resorts International for Entain Plc. Why? The UK gambling entity rejected its $11 billion takeover bid. Meanwhile, Entain shares have slumped as much as 20% in London.
The goal of the merger was full control of BetMGM by MGM. The joint venture had been experience rapid growth in the market. In addition, the stock of investors in Entain would be exchanged for 0.6 of a share of MGM. In fact, they have held about 42% of the combined business.
But it is over. Ladbrokes owner, Entain, rejected MGM’s $11 billion takeover proposal, stating that MGM “will maintain a disciplined framework while evaluating a range of compelling strategic opportunities.
According to a spokesperson at MGM,
“After careful consideration and having reflected on the limited recent
engagement between the respective companies regarding MGM’s
rejected all-stock proposal, it doesn’t plan to submit a new offer.”
MGM’s bid constitutes evidence of significant trans-Atlantic gambling activity following the legalization of sports betting by the U.S. Supreme Court in May 2018. The race was on for market share.
Here is some of what took place: MGM’s Las Vegas rival, Caesars Entertainment Inc., agreed to buy British bookmaker William Hill Plc for 2.9 billion pounds ($4 billion) in late 2020. Then Ireland’s Flutter Entertainment Plc acquired Canada’s the Stars Group earlier that year.
Back to the4 present: according to Gavin Kelleher, a Goodbody analyst,
“It’s been a rocky month but all told, everything that’s happened since
Dec. 31, I think there’s more positives with Entain than negatives.”
Meanwhile, in New York Trading, MGM shares rose as much as 4.9%. Entain, (previously called GVC) dropped 14% at 1,220.5 pence in London.
Nonetheless, Entain is confident about its existing growth strategy which should deliver stakeholder value. However, MGM’s decision to walk away ends a difficult few weeks for the company now facing opposition to its mission to acquire Enllabs.
On top of it all came the unexpected departure of Entain’s chief executive officer, Shay Segev, leaving after less than six months on the job.