MGM Resorts International offers $11.1 billion (£8.1 billion) to buy Entain, the owner of the British gambling company Ladbrokes. This move makes MGM Resorts International the most recent US casino operator to put a sizeable stake on the online betting industry which has been growing tremendously during the pandemic.
Entain revealed the proposal in a statement released on Monday. The proposal made by MGM represents a 22 percent premium over it closing price. However, despite the sizeable offer, Entain rejected the takeover by MGM citing that the deal significantly underestimated the value of the company’s shares and future prospects.
According to Entain, the board also requested MGM to provide more information regarding the strategic rationale for the two companies. The statement also revealed that the UK based company received multiple offers from MGM. So far, representatives of MGM have declined to comment on the deal.
On Monday, the shares in Entain soared more than 26 percent, which grew higher than the offer made by MGM. This increase in shares indicates that investors expect a better offer or another bidder. Although, a higher price may prove too much for the shareholders of MGM to handle. The US company operates various casinos including the Mandalay Bay and Bellagio. It is also one of the biggest players in Las Vegas.
MGM and Entain have an existing relationship, as they are the joint owners of the sports betting and online gaming company: BetMGM which operates in various US states. Brands like Eurobet, Ladbrokes, and Sportingbet are all owned by Entain, which runs both retail and online businesses.
The industry has been growing rapidly due to the US Supreme Court decision on 2018, which cleared that way for online sports betting to be legalized in states outside Nevada. The pandemic has also accelerated this process, making it one of the most lucrative and successful industries in recent times.
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