Entain responds to rumored $20bn takeover bid by DraftKings

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UK-based global sports betting firm Entain has issued a response to speculation that broke earlier today regarding a takeover offer allegedly made by US DFS and sports betting operator DraftKings.

Rumours of the proposed bid were aired by CNBC which, citing insider sources, reported that DraftKings had made a cash and stock bid – mostly stock – worth circa $20bn for the company.

Addressing the news, Entain released the following statement which read: “The Board of Entain plc notes the recent media speculation. The Board of Entain confirms that it has received a proposal from DraftKings to acquire Entain, the consideration for which would include a combination of DraftKings stock and cash.”

It added: “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. A further announcement will be made as and when appropriate. Shareholders are urged to take no action at this time.”

Entain also noted that DraftKings will now have to confirm or deny if such an offer is on the table. It noted: “Any offer for Entain is governed by the City Code on Takeovers and Mergers. Under Rule 2.6(a) of the Code, DraftKings must by not later than 5pm on 19 October 2021 either announce a firm intention to make an offer for Entain in accordance with Rule 2.7 of the Code or announce that it does not intend to make an offer, in which case the announcement will be treated as a statement to which Rule 2.8 of the Code applies. 

“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.”

The bid speculation follows on from last month’s buoyant interim results from Entain, in which it cited significant progress made by its US-facing business. BetMGM – the group’s joint venture in the US with MGM Resorts – continues to perform strongly, said the firm, and is well positioned for further success in H2 having generated H1 net gaming revenue of $357m.

On paper, Entain would present an attractive proposition for DraftKings. The firm has staked its claim as being the number two operator for sports-betting and igaming across the US with 22% market share, and as the number one operator in igaming, extending its leadership with 30% market share.