Jason Robins: DraftKings will not make a firm offer for Entain ‘at this time’

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DraftKings has issued a statement today confirming that it does not intend to acquire the UK-based global sports betting firm Entain at this time.

The decision was made, according to the DFS and sports betting operator, following further analysis and discussions with the Entain board of directors. 

News of a potential acquisition broke in September when Entain revealed it had received a $20bn share and cash takeover bid from DraftKings. The bid had followed an earlier approach from DraftKings at 2,500 pence per share (the consideration of which comprised a combination of DraftKings shares and cash) which was rejected. 

Jason Robins, DraftKings CEO, Co-Founder and Chairman of the Board commented on the withdrawal of interest: “After several discussions with Entain leadership, DraftKings has decided that it will not make a firm offer for Entain at this time.  

“Based on our vertically-integrated technology stack, best-in-class product and technology capabilities and leading brand, we are highly confident in our ability to maintain a leadership position and achieve our long-term growth plans in the rapidly growing North America market.”

As a result of this announcement, DraftKings is bound by the restrictions under Rule 2.8 of the Code for six months following the date of this announcement.

For the purpose of Rule 2.8 of the Code, the company reserves the right to set aside the above statement and the restrictions in Rule 2.8 of the Code in the event that it can find agreement with the Entain board; announce a firm intention to make an offer for Entain by or on behalf of a third party; announce a whitewash proposal or a reverse takeover, or where the panel determines a material change of circumstances. 

In response to DraftKings’ statement, Entain issued the following missive: “The board of Entain plc notes the announcement made earlier today by DraftKings Inc that it does not intend to make an offer for Entain. As a result of the announcement, DraftKings and its concert parties are bound by the restrictions contained in Rule 2.8 of the City Code on Takeovers and Mergers.

“The board strongly believes in the future prospects of Entain, underpinned by its leading market positions, world class management team and industry-leading proprietary technology. Entain has an outstanding track record of growth having delivered 23 consecutive quarters of double digit online NGR growth, representing a three-year CAGR of 19% across 2021.”

It added: “Entain’s management remains focused on executing its growth and sustainability strategy and on delivering the opportunities laid out in Entain’s capital markets event on 12 August to treble its total addressable market to c.$160bn.” 

Those opportunities, said the firm, include further growth in existing markets; leadership in the rapidly growing North American market through BetMGM; expanding into new regulated markets; extending into new interactive entertainment experiences such as in the emerging esports wagering market; and leveraging powerful flywheel effects to grow customer acquisition rates, increase customer loyalty and reduce acquisition costs.

“As a result the board is confident in Entain’s ability to continue to deliver material value for its shareholders going forward,” it concluded.