DraftKings Courts UK’s Entain With $22.4 Billion Offer as US Sports Betting Spurs Deals

By Reuters
Reuters
Reuters
September 22, 2021 Updated: September 22, 2021

British gambling firm Entain said on Tuesday that U.S. fantasy sports betting company DraftKings had made a takeover proposal that valued it at $22.4 billion.

Under its current proposal, DraftKings plans to offer 28 pounds per Entain share, representing a premium of 46.2 percent to the UK firm’s Monday close. Entain said it had earlier rejected a proposal from DraftKings to buy the company for 25 pounds ($34.15) per share.

Entain’s shares closed up 18 percent as the companies confirmed the approach, which would give the U.S. firm access to the Ladbrokes Poker and bwin online betting brands. Shares of DraftKings were down 0.6 percent in extended trading after closing 7.4 percent lower at $52.77.

DraftKings’ takeover proposal comes after Entain had rejected an $11 billion offer from U.S.-based MGM Resorts International in January, saying it undervalued the company, but analysts expect MGM to return with a new bid as it has since accumulated more cash.

Entain and MGM already have a joint venture called BetMGM, an online sportsbook for betting on NFL and NBA games that controls about 21 percent of the market versus DraftKings’ 17 percent, according to RBC Capital Markets.

Any deal in which Entain would own a competing business in the United States would require MGM’s consent, MGM said on Tuesday in response to DraftKings’ approach.

The deal frenzy in the online gambling space comes at a time when regional operators are looking to expand and capture opportunities in states across the United States opening up to sports betting.

In a transatlantic deal, Caesars Entertainment acquired Britain’s William Hill, a traditional rival to Entain’s Ladbrokes brand, in a 2.9 billion pound transaction earlier this year. Caesars is selling the non-U.S. assets of William Hill.

Demand for online betting boomed during the pandemic as customers took to playing from home when casinos and betting shops were off-limits.

DraftKings, which allows users to enter daily and weekly fantasy sports-related contests, confirmed it had approached Entain but did not provide any additional details. It bought rival Golden Nugget Online Gaming Inc in a $1.56 billion all-stock deal last month.

Entain said DraftKings had until Oct. 19 to make a firm offer for the company.

($1 = 0.7322 pounds)

By Subrat Patnaik and Nivedita Balu

Reuters