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MGM considers new offer for gambling giant: Casino group looking at Entain, owner of Ladbrokes, Coral and Gala Bingo later this year, according to City sources
No deal: Entain boss Jette Nygaard-Andersen rejected an earlier offer
Casino giant MGM Resorts is considering another takeover bid for FTSE-100 gambling group Entain, owner of Ladbrokes, Coral and Gala Bingo later this year, according to City sources.
The US company previously took a nosedive in January 2021. However, Entain, led by Danish businesswoman Jette Nygaard-Andersen, rejected the £8.1 billion approach because the price was too low.
Analysts think the bid is likely to be revived once the UK Gambling Commission has published its long-delayed white paper.
This has been a stumbling block for bidders eager to know what’s in it, as new rules could have a major impact on the valuations of UK gambling companies. For example, draconian measures on online or problem gambling can cause stock prices to plummet.
The report could be released as early as March.
A partnership between the two firms is a “rather obvious combination,” Deutsche Bank analysts said in a note last week. MGM’s previous offer was divided into cash and stock. Deutsche added that a new offer with additional cash would likely be “shareholder supported.”
Banking news site CTFN described the deal as “inevitable,” with sources suggesting MGM was “constantly weighing a bid” for Entain, previously called GVC. Entain is now worth £8.9bn – £800m more than MGM’s 2021 proposal.
The British company has been working with MGM since 2018 on a joint venture called BetMGM, which operates online sports betting, casino and poker games in a number of US states. BetMGM will publish a trading update on Thursday.
In the last financial year, the combined group earned more than £1 billion in revenue.
The US has been a lucrative market for UK companies as online gambling was illegal in America until a few years ago.
It has only been legalized in a few states, including New Jersey and Michigan.
A merger with Entain, whose technology and experience are highly regarded, would make it much easier for MGM to profit as more states legalize online gambling.
A separate attempt to take over Entain in 2021 by the American sports betting DraftKings also failed.
New York-listed MGM is valued at £12 billion. Founded in 1986, it owns some of the largest resorts in Las Vegas, including the MGM Grand, Mandalay Bay, Four Seasons, and New York-New York.
The Bellagio hotel and casino in Las Vegas, famous for its dancing water fountains, has a presidential suite available for more than £4,000 per night.