The shareholders of both MGM Resorts International and Entain will be the real “winners” if the proposed business combination goes through, according to Jason Ader.
It was announced on 4 January that MGM Resorts had made a proposal to acquire Ladbrokes and Coral operator Entain, with MGM Resorts since confirming the bid but asserting it cannot be certain a firm offer will be made at this stage.
The offer would see MGM Resorts offer 0.6 shares for each Entain share, which represents a value of £13.83 ($18.75) per share and values the operator, previously known as GVC Holdings, at approximately $11bn.
Gaming industry analyst and SpringOwl Asset Management CEO Ader has exclusively told Gambling Insider he was not surprised by the proposed takeover and that he expects further M&A to take place within the industry in 2021.
Ader said: “My general reaction is I feel like I predicted it and I’m not surprised by it. I think land-based companies need to buy online companies and the pandemic has just accelerated that philosophy and I believe there is more to come.
“I do see MGM Resorts and Entain coming together as I think MGM Resorts will sweeten its price and the winners will be the Entain and MGM Resorts shareholders in my view.”
Ader also believes the coronavirus pandemic has accelerated the process for M&A, with online thriving over land-based gaming, and he expects the competition to acquire the likes of 888 Holdings and Playtech to hot up.
Ader added: “The pandemic has accelerated such acquisitions because land-based companies realise that online businesses are now real growing businesses and some of the companies specialising in online now have bigger valuations.
“There are more land-based buyers than online gaming companies, so for 888 and Playtech it’s like having 10 buyers who want to buy into an apartment building but there’s only two units left; so the guys who own the last two units are in a pretty decent spot.”