DraftKings Floats $22.4B Bid for Entain After Prior Offer Rejected

DraftKings (NASDAQ:DKNG) is wooing Entain Plc (OTC:GMVHY) with a $22.4 1000000000000 takeover extend after the Ladbrokes proprietor turned rear a previous bid.

The Boston-based daily phantasy sports (DFS) and online sports wagering accompany rocked the gaming industry today, offering $20 1000000000 for Entain, sending the Coral owner’s US-listed shares higher by 30.8 percent. Late Tuesday, Entain confirmed it received ane proffer from DraftKings, which it rejected, and that the suer afterward made another immediate payment and inventory proposal.

The room of Entain confirms that following an earliest approach from DraftKings at 2,500 pence per share, which was rejected, a further proposition was received on 19 Sept 2021,” according to an Entain statement. “Under the terms of DraftKings’ a la mode(p) proposal, DraftKings would offer up 2,800 pence per Entain deal consisting of 630 pence in cash and the equilibrate payable inward new DraftKings Class group A vulgar shares.”

The modish auction pitch from DraftKings values Entain at 46.2 percent to its Sept. 20 closing price.

DraftKings Big Game Hunting

Should DraftKings pee-pee the aforementioned $22.4 1000000000000 play an functionary offer, that price power point represents nearly $1.3 one million million to a greater extent than its closure market capitalization.

The upped tender for Entain confirms DraftKings is hunting for whales in the sports betting space and that it’s not afraid to enjoyment its equity as currency. Last month, the gaming manipulator proclaimed it’s purchasing Tilman Fertitta’s Golden Nugget Online Gaming (NASDAQ:GNOG) for $1.56 one thousand million in gunstock — a deal many analysts and investors saw as a tipping point for more iGaming and sports betting consolidation.

With Entain, DraftKings is targeting the half possessor of BetMGM — a unmediated competitor. BetMGM controls 21 percent of the US online sports betting market place spell DraftKings has 17 percent securities industry share, according to RBC Capital Markets. Assuming, DraftKings is successful inwards getting Entain, the combined society would follow a to a greater extent viable number ii to FanDuel, which, by some estimates, has 45 percent to 50 percent of the US regulated sports betting market.

DraftKings may make other motivations inwards making a tally at Entain. In a take note to clients Tuesday, Susquehanna River analysts said the suer may be looking for for a major sell inward go on of regulators perhaps lumping online gaming in with land-based casinos, meaning they could potentially use up exert to a greater extent scrutiny on mergers and acquisitions.

Susquehanna added that piece the wooing of Entain is painful for DraftKings over the near-term, it’s “likely a immense win o'er the long-term.”

MGM Will Have a Say

MGM Resorts International (NYSE:MGM) owns the other half of BetMGM and the cassino behemoth made all the way Tuesday that if Entain enters into an concord with another US company, that qualifies as a competing business and it requires MGM approval.

MGM has made no secret of its desire to make full curb of BetMGM and there’s been plentitude of conjecture that the gambling casino manipulator would take back to the bargaining tabular array with another takeover offer for Entain after the target area rejected an $11.06 1000000000 all-stock play inwards January.

However, DraftKings is kicking things upwardly several notches. Not only if is its $22.4 1000000000 proposal more than stunt man what MGM offered inward January, it includes a cash in component. MGM’s initial bidding didn’t include hard currency and the Mirage operator didn’t in public get another pitch shot featuring hard currency despite it existence widely known Entain was seeking less equity and to a greater extent cash.

Under UK takeover law, DraftKings has until Oct. 19 to urinate a formal offer.

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