DraftKings woo Britain’s Entain with $ 22.4 billion bid as US boosts sports betting

Sept. 21 (Reuters) – UK gambling firm Entain (ENT.L) said on Tuesday that US fantasy sports betting firm DraftKings (DKNG.O) had made a buyout offer that valued it at 22.4 billions of dollars.

As part of its current proposal, DraftKings plans to offer £ 28 per Entain share, which is a 46.2% premium over the UK firm’s Monday close. Entain said it previously rejected a proposal by DraftKings to buy the company for 25 pounds ($ 34.15) per share.

Entain’s shares closed up 18% as the companies confirmed their approach, which would allow the US company access to the online betting brands Ladbrokes Poker and bwin. DraftKings shares were down 0.6% in extended trading after closing 7.4% lower at $ 52.77.

The DraftKings buyout proposal comes after Entain rejected an $ 11 billion offer from U.S.-based MGM Resorts International (MGM.N) in January, saying it was undervaluing the company, but analysts said expect MGM to come back with a new offer as it has since racked up more cash. Read more

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

Any deal in which Entain owns a competing company in the United States would require the consent of MGM, MGM said Tuesday in response to DraftKings’ approach.

The trading frenzy in the online gaming space comes at a time as regional operators seek to expand and seize opportunities in states of the United States that are opening up to sports betting.

In a transatlantic deal, Caesars Entertainment (CZR.O) acquired Britain’s William Hill, a traditional rival to Entain’s Ladbrokes brand, in an earlier £ 2.9 billion deal. This year. Caesars sells the non-US assets of William Hill. Read more

Demand for online betting exploded during the pandemic as customers started gambling from home when casinos and betting shops were banned.

DraftKings, which allows users to enter daily and weekly fantasy sports-related contests, confirmed they approached Entain but did not provide any further details. It bought rival Golden Nugget Online Gaming Inc (GNOG.O) in a $ 1.56 billion deal last month.

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

($ 1 = 0.7322 pounds)

Reporting by Subrat Patnaik and Nivedita Balu in Bengaluru, Krystal Hu in New York; Additional reports by Yadarisa Shabong and Chavi Mehta; Editing by Ramakrishnan M., Sriraj Kalluvila, Steve Orlofsky and Anil D’Silva

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