Jan 07, 2022 | AS Team
Entain has been at the centre of two attempted takeovers during 2021, both from rival gaming groups in North America. Despite numerous attempts to acquire Entain and their leading bookmakers and online casinos, the group has yet to be bought out by another group, and it is unsure whether either of the parties will be back at the negotiation table in 2022.
Learn about the details of these attempted acquisitions and uncover some of the possible complexities here.
Entain PLC is a gaming and entertainment group from the UK but operating in over 25 countries. They own some of the most successful and recognisable bookmakers and online casinos in the world, including one of the best performing brands in the industry, PartyCasino.
As of late, the group has been trying to penetrate both the US and Canadian gaming markets due to both nations recently loosening their sports betting laws. But it is the loosening of these laws which has made Entain a valuable partner or lucrative acquisition for local groups.
MGM made a string of bids for Entain earlier in 2021. However, all of the bids were rejected because Entain believed they were not meeting the true valuation of the group. It is reported that three bids were rejected in total before negotiations halted.
Despite the deal not going through, MGM Resorts and Entain have collaborated to become partners in a new sportsbook called BetMGM. This sportsbook predominantly uses the technologies of Entain and the recognisable and trusted branding of MGM in the US. The sportsbook has grown to be a success and one of the few official NFL sportsbook partners.
DraftKings is a fantasy sports operator and online sportsbook serving a North American market. The groups, as well as MGM, have recently been named as one of the top casino stocks to invest in.
They have recently attempted to acquire Entain for the same reasons that MGM did. They wanted to harness Entain’s ready-made technologies and platforms to make early strides in the new local sports betting markets. As DraftKings and MGM are considered close competitors, it may be that the drive to purchase Entain was spurred on by the MGM deal falling through.
Unlike MGM, DraftKings left the negotiations without formally making an offer. The reason for this is not sure, but it may be due to negotiations suggesting there is a significant valuation disagreement between the parties. This opens the door for MGM to make another bid, for DraftKings to make further bids in the coming years (they must wait at least six months unless another bid is made), or for Entain to continue on its own.
There are complexities about the potential takeover from DraftKings due to the way shares will be used to fund any proposed deal. Another hurdle is that Entain has already partnered with MGM to create the BetMGM sportsbook. If DraftKings was to acquire Entain, it would mean they would have a sportsbook with one of their closest rivals.