The last two days of trading on the London Stock Exchange saw Entain’s share price drop by as much as 14.43% on February 10th after the US casino operator MGM Resorts dismissed the possibility of making a second acquisition bid for the UK gambling group, shattering the hopes of the company’s investors for a large payout.
As Casino Guardian previously reported, the casino operator first made a takeover offer for the British gambling company in January 2021. At the time, MGM Resorts offered Entain’s shareholders a deal that valued the UK gambling group at £13.83 per share, or £8 billion – an offer that was approximately 20% larger than the company’s trading price at the time. However, the takeover bid was turned down by Entain’s shareholders as too low.
Despite the first unsuccessful offer, industry insiders and some shareholders of Entain had expected the US casino giant to revive its offer for the British gambling operator once the UK Government published its much-expected review of the gambling industry – a move to bring the necessary changes to the sector and make it more suitable for the current development of the industry.
When approached for a commentary on their plans for a potential takeover bid regarding Entain, the chief executive officer of MGM Resorts, Bill Hornbuckle rejected the possibility, saying that his company had moved on.
MGM Resorts’ Boss Says US Casino Giant Will Focus on Joint Venture with Entain
At the time when he commented on his company’s future plans, Mr Hornbuckle noted that he remained very much focused on the betting and gaming joint venture of MGM Resorts and Entain, BetMGM, which currently offers its services in 25 US states. He also explained that he would seek an expansion of the mobile betting operator LeoVegas, which was taken over by the US casino giant for about $604 million in 2022.
MGM Resorts’ chief executive officer rejected the possibility of seeking further acquisition of Entain as they were going to go down their own direction as they started allocating capital.
As mentioned above, the share price of Entain fell by almost 13% on February 9th, and by more than 14.40% on February 10th – a significant share price decline that Entain declined to comment on.
One of the leading shareholders of the UK gambling group shared that they had assumed that it was inevitable for MGM Resorts to make another acquisition bid for the company as the US casino giant was willing to take full control of its joint venture with Entain. As explained by the investors, the company’s shareholders hoped to get £20 a share. Unfortunately, it seems that the process would not go as they had hoped for.
On the other hand, market experts had predicted that MGM Resort could have approached Entain with a better offer. According to one of the Peel Hunt’s analysts – Ivor Jones – a second takeover for Entain had been a widely-held industry assumption. Now that MGM Resorts has backed down, analysts believe that it is possible for the US casino operator to buy out Entain’s share of the joint venture.
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Olivia Cole
