Entain – Mulls A DraftKings Offer
Entain PLC (LON:ENT) has confirmed that it’s received two approaches to buy the company from Draftkings Inc (NASDAQ:DKNG). The first at £25.00 a share was rejected. The second mixed cash and shares deal offer values Entain at £28.00 per share, reflecting a 46.2% premium from the group’s closing share price on 20 September.
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Entain management confirmed they are considering the offer.
The shares rose 8.7% following the announcement.
DraftKings Offers To Acquire Entain
Laura Hoy, Equity Analyst at Hargreaves Lansdown:
“US sports betting company DraftKings has added its name to a growing list of American businesses intent on gobbling up UK firms. Ladbrokes and Coral owner Entain finds itself once again the target for acquisition, with this latest offer, after partner MGM’s bid was rebuffed back in January.
The details of the offer became more clear this morning—DraftKings is prepared to offer £28 per share, a 46.2% premium to the groups 20 Sept share price. While Entain confirmed it would mull the proposal over, there’s no guarantee that a deal will go ahead. Even if the offer is accepted, the usual regulatory scrutiny could be further complicated by antitrust concerns due to BetMGM, Entain’s joint venture with US Casino operator MGM.
We suspect that BetMGM is a big part of the reason DraftKings is interested at all, which may mean it will look to offload other parts of the business like the Ladbrokes and Coral physical betting shops down the line, as Caesars Entertainment has done with William Hill’s shops. But MGM will have a hand in negotiating the terms of the deal, which could ultimately put DraftKings off following through. There’s also a chance DraftKing’s bold move could push MGM to make another offer for Entain, though we think this possibility is unlikely considering it would require MGM to substantially increase its former offer.”
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