MGM Resorts International has confirmed it has made a proposed offer for Entain but admitted there’s “no certainty” a firm bid will be made for the operator.
It was announced on 4 January by Entain, previously known as GVC Holdings who operates Ladbrokes and Coral among other sports betting brands, that it had received a proposal from MGM offering 0.6 MGM shares for each Entain share.
The proposal represents a value of 1,383p ($18.91) per Entain share, valuing the operator at approximately $11bn, which Entain believes “undervalues the company and its prospects.”
MGM has since confirmed its valuation, stating that Entain shareholders would own 42% of the combined company and that a cash alternative could be made available for the operator’s shareholders.
The casino operator suggested the proposal and reasons for a combination are “compelling”, believing a merger would allow the two company’s joint venture BetMGM to thrive in the US market under full control, and position the business as a “global gaming company” across both online and retail.
MGM also said the merger would expand and diversify operations and offerings and align it for future growth, as well as investment. It has until 1 February to either make or announce its firm intention to put forward an offer for Entain with MGM making clear that it cannot be certain such offer will be submitted at this stage.