MGM mulls new offer for gambling giant: Casino Group eyeing Entain, owner of Ladbrokes, Coral and Gala Bingo, later this year, city sources say
No deal: Entain boss Jette Nygaard-Andersen rejected a previous offer
Casino giant MGM Resorts is considering another takeover bid for FTSE-100 gaming group Entain, which owns Ladbrokes, Coral and Gala Bingo, later this year, city sources say.
The US company had already swooped in January 2021. However, Entain, led by Danish businesswoman Jette Nygaard-Andersen, pushed back on the £8.1bn approach on the grounds that the price was too low .
Analysts believe the bid will likely be revived once the UK Gambling Commission publishes its long-delayed white paper.
It has been a stumbling block for bidders, who want to know what’s in it, as new rules could have a big impact on the valuations of gambling businesses in the UK. Draconian measures on online or problem gambling, for example, could cause share prices to plummet.
The report could be published as early as March.
A tie-up between the two companies is a “pretty obvious combination,” Deutsche Bank analysts said in a note last week. MGM’s previous offer was split between cash and stock. Deutsche added that a new offer with additional cash would likely be “supported by shareholders.”
Banking news site CTFN described the deal as “inevitable”, with sources suggesting MGM was “constantly evaluating an offer” for Entain, formerly called GVC. Entain is now worth £8.9bn, which is £800m more than MGM’s 2021 proposal.
The British company has been working with MGM on a joint venture since 2018 called BetMGM, which operates online sportsbook, casino and poker games in a number of US states. BetMGM will release a trading update on Thursday.
In its last financial year, the joint group made over £1 billion in revenue.
The US has been a lucrative market for UK businesses as online gambling was illegal in America until a few years ago.
It has only been legalized in a few states so far, including New Jersey and Michigan.
A merger with Entain, whose technology and experience are highly valued, would make it much easier for MGM to benefit when more states legalize online gambling.
A separate attempt to take over Entain in 2021 by US sports betting firm DraftKings also failed.
MGM, listed in New York, is valued at £12 billion. It was established in 1986 and has some of the largest resorts in Las Vegas, including the MGM Grand, Mandalay Bay, Four Seasons, and New York-New York.
His Bellagio Hotel and Casino in Las Vegas, famous for its dancing water fountains, has a Presidential Suite available for over £4,000 a night.
