DraftKings, a prominent US iGaming brand, has made a $22bn offer to take over a fellow firm, Entain. The London-based powerhouse has confirmed they have received an official proposal from the potential buyer. The purchase proposition states they would pay approximately $38.20 per share. It amounts to a premium of 46.2% to the British enterprise’s closure.
When the news has reached the public, the price of the British company’s shares has gone up around 18%. If they accept the offer, DraftKings will gain access to multiple reputable brands, including partypoker, Ladbrokes and bwin. However, DraftKings is not the only company interested in the purchase. The British giant has already refused the $11bn proposition made by MGM Resorts International. It was an all-stock offer and the officials said it had seriously underestimated Entain.
Waiting for More Lucrative Bids
It is said it won’t be the last proposal from MGM. The enterprise is a majority stakeholder in MGM Growth Properties, which is to be sold to VICI Properties, a real estate company. They are about to receive a hefty amount of $4.4bn and this income will likely mean a more substantial offer. Entain is expected to bid their options and decide on the best offer.
The $22bn proposition from DraftKings is also not the first one this US company has ever made. The British firm said they had refused the previous offer from DraftKings, adding they now have a deadline to meet. It is expected DraftKings should make a more lucrative offer until October 19, 2021. It would not be the only partnership the US company entered lately. Namely, they have recently agreed to purchase Golden Nugget Online Gaming in a $1.56bn transaction.
Promised Land for iGaming
DraftKings looks to obtain Entain and empower its influence in the market. Not only will they expand their global footprint, but they will also establish their authority in the US. The new developments have shown the US to be the promised land for sports betting and online gaming. Since the Supreme Court voided a federal ban in 2018, iGaming has become incredibly popular. As the activity got increasingly lucrative, it has prompted many European iGaming giants to set their eyes on the market.
However, it should be noted that Entain is already present on the US territory. The agreement with MGM has them running BetMGM as partners. Their operations are active in numerous regulated states. MGM has no involvement in the Entain offer, but if DraftKings wants to close any deal, it would require their consent. Any transaction with competing companies that includes Entain’s US assets cannot go through without it.
MGM will sit down with both DraftKings and Entain to try and find an acceptable solution. The arrangements will have to meet all parties’ needs. Multiple regional operators have expansion plans and want to take opportunities to team up with other companies. The iGaming sector has been caught in a partnership frenzy since the US opened towards sports betting.