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SummaryMost relevantAll NewsAnalyst Reco.Other languagesPress ReleasesOfficial PublicationsSector newsMarketScreener Strategies

Entain soars on DraftKings bid; MGM keeps poker face

09/22/2021 | 03:51am EDT

* Entain shares hit all-time high, rise as much as 11%

* DraftKings proposes 28 stg/Entain share bid

* MGM says Entain needs its consent to compete in the U.S.

Sept 22 (Reuters) - Entain's shares hit a record high on Wednesday after the British gambling group received a $22.4 billion takeover proposal from U.S. rival DraftKings , double a bid it rejected from joint venture partner MGM in January.

Dealmaking is picking up in the online gaming industry as the United States opens up to sports betting and players look to build scale and tap the expertise of foreign companies in more developed markets.

Shares in Entain, which owns traditional Ladbrokes and Coral betting shops as well as newer online brands such as bwin and partypoker, jumped as much as 11% to hit 25 pounds and top London's benchmark index.

That compared with the 28 pounds cash and stock proposal from DraftKings, a 46.2% premium to Entain's closing price on Monday, which followed an earlier approach of 25 pounds rejected by Entain.

"The board of Entain will carefully consider the proposal," said Entain, led by new CEO Jette Nygaard-Andersen. DraftKings has until Oct. 19 to either make a firm bid or walk away.

DraftKings' interest comes weeks after it clinched a $1.6 billion deal to buy U.S. rival Golden Nugget.

As for its bet on Entain, analysts said much would depend on the British company's U.S. joint venture partner, MGM, which said any deal that would make Entain a competitor in the United States would require its consent.

JP Morgan analysts said that to win MGM's approval, DraftKings may have to sell Entain's 50% stake in BetMGM to MGM, leaving DraftKings with Entain's rest-of-the-world operations, as well as its technology and expertise.

That would mirror the fate of William Hill, another storied British betting brand that U.S. group Caesars bought in a 2.9 billion pound deal earlier this year, only to then sell its non-U.S. operations.

Alternatively, DraftKings could seek to merge with BetMGM, giving MGM a stake in the new company. "However, the deal would have to be attractive for MGM to give up its desire to have control," the JP Morgan analysts said.


BetMGM, an online sportsbook for betting on NFL American football and NBA basketball games, controls 21% of the market versus DraftKings' 17%, according to RBC. Flutter-owned FanDuel is another major player.

The joint venture is targetting $1 billion in revenues for 2022, while Entain - which along with MGM is investing $660 million in the partnership this year - expects it to be in 20 U.S. states over the next 12 months.

"Staid UK high street bookmakers are not an obvious fit for a U.S. fantasy sports giant, but it's Entain's U.S. sports betting venture with MGM that's drawn DraftKings eye" Hargreaves Lansdown analyst Nicholas Hyett said.

"Entain not only has the necessary know-how, but also the brand and market position to give it the best chance of success."

London-listed companies have been pioneers in gambling technology, developing apps that allow fans to place "in play" bets while they watch a match live.

Entain, whose previous boss Shay Segev left after it snubbed MGM's $11 billion approach, has been on its own buying spree too, snapping up European operators Bet.pt and Enlabs AB .

The company, which has a database of 160 million players and saw more than 2 million sports bets placed on its platforms a day last year https://entaingroup.com/wp-content/uploads/2021/05/Entain-2020-Annual-Report.pdf, has been investing in technology.

For example, it is using behavioural indicators to help identify gamblers at risk of addiction or financial hardship.

(Reporting by Muvija M in Bengaluru Editing by Keith Weir and Mark Potter)

© Reuters 2021
Stocks mentioned in the article
ChangeLast1st jan.
AMERICAN BUSINESS BANK 0.00% 38.95 Delayed Quote.21.58%
CAESARS ENTERTAINMENT, INC. 0.19% 113.4 Delayed Quote.52.57%
DRAFTKINGS INC. -3.17% 47.35 Delayed Quote.5.07%
ENTAIN PLC 1.22% 2147.4 Delayed Quote.87.30%
All news about ENTAIN PLC
10/21DRAFTKINGS : Deadline for DraftKings and Entain takeover extended at last minute
10/20FORM 8.3 - THE VANGUARD GROUP, INC. : DraftKings Inc
10/20DRAFTKINGS : Deadline for DraftKings and Entain takeover deal extended
10/19ENTAIN : Extension of “Put Up or Shut Up” deadline
10/19ENTAIN : Gets Deadline Extension For Takeover Offer From DraftKings
10/19WALL STREET STOCK EXCHANGE : Earnings season continues to deliver
10/19NO OFFER YET : DraftKings gets one more month to bid for UK's Entain
10/19ENTAIN : Completion of Unikrn deal underpins Entain's launch into esports wagering in 2022
10/19Entain Plc completed the acquisition of Unikrn, Inc.
10/18INVESCO LTD. : Form 8.3 - Entain Plc
More news
Analyst Recommendations on ENTAIN PLC
More recommendations
Sales 2021 3 838 M 5 293 M 5 293 M
Net income 2021 258 M 355 M 355 M
Net Debt 2021 2 034 M 2 805 M 2 805 M
P/E ratio 2021 67,6x
Yield 2021 1,22%
Capitalization 12 449 M 17 189 M 17 169 M
EV / Sales 2021 3,77x
EV / Sales 2022 3,22x
Nbr of Employees 18 918
Free-Float 97,5%
Duration : Period :
Entain plc Technical Analysis Chart | MarketScreener
Full-screen chart
Technical analysis trends ENTAIN PLC
Short TermMid-TermLong Term
Income Statement Evolution
Mean consensus BUY
Number of Analysts 18
Last Close Price 2 123,00 GBX
Average target price 2 318,27 GBX
Spread / Average Target 9,20%
EPS Revisions
Managers and Directors
Jette Nygaard-Andersen Chief Executive Officer & Director
Robert Matthew Wood CFO, Director & Deputy Chief Executive Officer
John Michael Barry Gibson Non-Executive Chairman
Sandeep Tiku Chief Operating Officer
Peter A. Isola Independent Non-Executive Director
Sector and Competitors
1st jan.Capi. (M$)
ENTAIN PLC87.30%17 189
EVOLUTION AB78.68%37 322