Entain confirms DraftKings’ interest in reported $20bn acquisition
Entain has confirmed media reports that prominent US sports wagering and fantasy sports operator DraftKings is interested in acquiring the company.
A statement from the company’s board earlier today confirmed that a DraftKings proposal to acquire the FTSE100 firm had been received, and that such a takeover would include a combination of the former’s stock and cash.
However, the group maintained: “There can be no certainty that any offer will be made for the company, nor as to the terms on which any such offer may be made.”
In accordance with Rule 2.7 of the City Code on Takeovers and Mergers, DraftKings has until 5pm on 19 October 2021 to ‘announce a firm intention’ to make an offer for Entain, or confirm that it has no intention to make such an offer.
Entain added: “This deadline will only be extended with the consent of the Panel in accordance with Rule 2.6(c) of the Code. This announcement has been made without the consent of DraftKings.”
It was reported by CNBC earlier today that DraftKings had made a $20 billion takeover offer for the company, with the outlet claiming that the transaction would mostly consist of stock.
This marks the second time a US-based betting and gaming company has expressed interest in acquiring Entain in the past 12 months, following on from MGM’s unsuccessful merger attempts.
In January of this year, the American firm made an offer of 0.6 MGM shares for each Entain share, representing a value of 1,383 pence per share and a premium of 22% to the company’s share price.
This was, however, rejected by Entain, with Chairman Barry Gibson stating that the $11 billion offer ‘significantly undervalued the company’s future growth prospects’.
Despite this, Entain continues to enjoy North American success, having secured its position as the country’s second biggest sports-betting and igaming operator with 22% market share.
In addition, its US-facing subsidiary BetMGM – operated in cooperation with MGM Resorts – also performs strongly according to the firm, generating net gaming revenue of $357 million in the first six months of 2021.