Business & Investment

Ladbrokes owners say MGM’s $ 11 billion acquisition underestimates Reuters’ company

© Reuters.File Photo: Circus Circus Hotel and Casino can be seen along the Las Vegas Strip

By Tanishaa Nadkar

(Reuters)- Ladbrokes (LON :) Owner Entain said on Monday that the $ 11 billion acquisition approach from US casino operator MGM Resorts (NYSE :) is a business as companies seek to take advantage of the expected boom in US sports betting. Said to be significantly underestimated.

The United States is widely regarded as the next big growth market following the 2018 Supreme Court ruling that lifted the ban on sports betting. US companies have sought partnerships to leverage their European expertise, including a £ 2.9 billion deal in Caesars (NASDAQ :) Entertainment to William Hill in the United Kingdom.

Britain’s Entain, formerly known as GVC, has been a joint venture with MGM since 2018, when it established an online betting platform in the United States after a court ruling.

According to Reuters calculations, MGM’s proposed offer of 1,383 pence per share of Enterein means a total transaction value of £ 8.09 billion ($ 11.08 billion) against the last closing price of Enterein. It represents a 22% premium.

Entain’s share price surged 28% on Monday to a record high of 1,455 Pence, leading the UK’s stock index to rise in early trading.

Entain said it received multiple suggestions from MGM. The latest proposal is that MGM has offered 0.6 shares for each share of Entain. Under this proposal, Entain’s shareholders will own approximately 41.5% of the expanded MGM.

“Entertain has informed MGMRI that it believes the proposal significantly underestimates the company and its outlook,” he said on Monday.

Analysts at Davy Research also said the proposal underestimated the Group’s business, including its outlook in the United States.

“Therefore, the flexibility of MGM and its ability to improve its delivery will be key,” they added.

Entain has expanded rapidly through a series of acquisitions and owns the bwin, Coral and Eurobet brands. We are asking MGM for more information on the strategic rationale for the combination.

The Las Vegas-based MGM has shown that limited partial cash alternatives will also be available to Entain shareholders, the company said.

MGM did not immediately respond to Reuters’ request for comment.

This proposal was reported by The Wall Street Journal on Sunday.

($ 1 = 0.7301 lbs)

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Ladbrokes owners say MGM’s $ 11 billion acquisition underestimates Reuters’ company

https://www.investing.com/news/economy/ladbrokes-owner-entain-receives-11-billion-takeover-offer-from-mgm-2378968 Ladbrokes owners say MGM’s $ 11 billion acquisition underestimates Reuters’ company

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