Sports betting operator Entain has been moved to issue a further statement in relation to a $20bn share and cash takeover bid from DraftKings, news of which broke yesterday.
In its new statement, the company confirmed that following an earlier approach from DraftKings at 2,500 pence per share (the consideration of which comprised of a combination of DraftKings shares and cash) which was rejected, a further proposal was received on 19 September 2021.
It noted: “Under the terms of DraftKings’ latest proposal, DraftKings would offer 2,800 pence per Entain share consisting of 630 pence in cash and the balance payable in new DraftKings Class A common shares.
“DraftKings proposed that the exchange ratio which would deliver the share element of the 2,800 pence per Entain share was to be fixed immediately prior to the first agreed public announcement. 2,800 pence per Entain share represented a premium of 46.2% to Entain’s closing share price on 20 September 2021.
“The Board of Entain strongly believes in the future prospects of the company underpinned by its leading market positions, world class management team and industry-leading technology. The company has a strong track record of growth and runway for further significant growth as set out in the capital markets day on 12th August, with the potential for its total addressable market to grow by more than three times to $160bn.
“This includes its leadership position in the rapidly growing North American market through its joint venture BetMGM. Entain has the most diversified and regulated revenues of any of the global operators and leads the industry in player protection through its ARC program (Advanced Responsibility and Care).”
According to Entain, its board will “carefully consider the proposal and a further announcement will be made as and when appropriate”. The firm also urged shareholders to take no action at this time, adding that 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.
Meanwhile, Entain’s US partner MGM Resorts has pitched in with a statement of its own, saying: “MGM Resorts International is aware of DraftKings Inc’s possible offer for Entain plc. MGM is Entain’s exclusive partner in the US online sports betting and igaming market through our highly successful 50/50 joint venture BetMGM LLC.
“As a consequence, any transaction whereby Entain or its affiliates would own a competing business in the US would require MGM’s consent.”
The firm added that its priority is to ensure that BetMGM continues to capture the growing US online opportunity and realizing MGM’s vision of becoming a premier global gaming entertainment company.
It stated: “MGM believes that having control of the BetMGM joint venture is an important step towards achieving its strategic objectives. MGM will engage with Entain and DraftKings, as appropriate, to find a solution to the exclusivity arrangements which meets all parties’ objectives.