MGM Resorts International is bidding to acquire Entain Plc to get total control over the online gaming and sports wagering business of BetMGM that it formed with Entain Plc. But the Wall Street Journal calls it a rumor.
What was the deal offered by MGM Resorts for BetMGM?
According to the report, the MGM Resorts made a $10 billion offer but Entain Plc rejected that offer. And there is no information about any new offer by MGM but some sources said that MGM had the financial support of Barry Diller’s IAC/InterActiveCorp.
Last year in August, IAC revealed it owned $1 billion stake in MGM. It is equivalent to 12% of shares outstanding. Presently Entain holds a market capitalization of $9 billion. The sources said that MGM could make an offer by mixing cash and equity to Entain. MGM recently raised $5.9 billion from the sale of $700 million worth of units in gaming and real estate investment trust (REIT).
What is the agreement between MGM and Entain?
Entain previous known as GVC Holdings formed BetMGM by joining hands with MGM Resorts in 2018. Together both the partners allocated $200 million to start the venture and took it to $450 million in last July. Under the present agreement, both the partners have split economics.
What encouraged MGM to buy BetMGM?
The US iGaming and sports wagering industries are taking off and the traditional gaming companies are looking for higher margins. They are more interested in less cost-incentive businesses. Also, Wall Street is preferring the companies that enjoy total control of their operations like in the case of BetMGM.
But MGM is believed to take the lead from the Caesars Entertainment incident where Caesars acquired its online casino partner William Hill for $3.69 billion in a deal. MGM is also trying to do the same with its online casino partner Entain Plc.
Advantage Entain Plc
The company witnessed a 25% jump in its share prices last year and if its share prices continue to ascend, buyers including MGM would have to pay a good sum to the British company. But it isn’t clear whether Entain will accept any offer from MGM or from any other buyer. For MGM, it is a good time for a deal as Entain provides technology services but BetMGM is more popular because of the brand name. Also, it has presence in selected states that makes it eligible to get iGaming licenses in those states.
Source : https://www.casino.org/news/mgm-resorts-is-entertaining-a-takeover-of-betmgm-partner-entain/
I don’t think the title of your article matches the content lol. Just kidding, mainly because I had some doubts after reading the article.