Ladbrokes owner Entain Plc said on Monday an $11-billion bid proposal from U.S. casino operator MGM Resorts (NYSE:MGM) significantly undervalued its business in the latest transatlantic move in a fast consolidating sector.
The proposed offer of 1,383 pence per Entain share implies a total deal value of £8.09 billion ($11.08 billion U.S.). It represents a premium of 22% to Entain’s last close.
The United States is seen as the next big growth market for sports betting, spawning a series of transatlantic partnerships tapping into European expertise such as Britain’s William Hill being bought by Caesars Entertainment in a £2.9-billion deal announced in September.
Entain said it received multiple proposals from MGM, with the most recent one being MGM’s offer of 0.6 of its shares for each Entain share.
The British company, previously known as GVC, said its shareholders would own about 41.5% of the enlarged MGM.
MGM has indicated that a limited partial cash alternative would also be made available to Entain shareholders, the company said.
According to one analyst, "The acquisition of Entain would help MGM integrate the digital gaming segment with its land-based casino and entertainment businesses to create a holistic omni-channel offering.
“We believe the omni-channel integration across digital and land-based gaming is a significant opportunity that is still widely overlooked by investors. While Entain brings technology and experience in the digital gaming industry, there is significant value across MGM’s well-known brands, its 34-million+ Mlife loyalty members, and top notch land-based casinos (and market access) across the U.S."
MGM, for its part, saw its shares doze on the launch pad to remain at $31.51, where they closed New Year’s Eve.
