MGM Resorts International has announced that it will not be pursuing a takeover of Ladbrokes and Coral owner Entain, previously GVC Holdings.
The Las Vegas-based casino operator, who is in partnership with Entain for its sports betting BetMGM brand, proposed an £8.1 billion (Around $11 billion) takeover offer earlier this month. Entain rejected MGM Resorts’ takeover proposal, the group claimed that the offer “significantly undervalues” the group and asked for more details on the company’s decision.
This week, however, MGM Resorts International has announced its decision to withdrawal all offers, revealing that it has no intentions to submit a revised offer and that “after careful consideration” will not be making a firm offer for the company.
A statement issued by MGM Resorts International reads: “MGM is committed to being a premier global omnichannel gaming and entertainment company and will maintain a disciplined framework while evaluating a range of compelling strategic opportunities.”
Bill Hornbuckle, the Chief Executive of MGM Resorts International, said in a statement to the Guardian: “BetMGM, our US sports betting and online gaming venture with Entain, remains a key priority for the company as we continue to leverage our pre-eminent physical gaming, entertainment, and hospitality platform to expand digitally.
“We believe that BetMGM has established itself as a top-three leader in its markets and we remain committed to working with Entain to ensure its strong momentum continues as it expects to be operational in 20 states by the end of 2021.”
Since the announcement, Entain’s share price has dropped 16% on the London Stock markets, and the bookmaker has issued a response to MGM Resorts’ withdrawal, saying:
“The Board of Entain plc notes the announcement made earlier today by MGM Resorts International that it does not intend to make an offer for Entain. As a result of the announcement, MGMRI and its concert parties are bound by the restrictions contained in Rule 2.8 of the City Code on Takeovers and Mergers.
“The statement Entain has a clear growth and sustainability strategy, backed by leading technology, that it is confident will deliver significant value for stakeholders. We look forward to continuing to work closely with MGMRI to drive further success in the US through the BetMGM joint venture.”
Under city rules on takeovers, MGM Resorts International must wait up to six months before it can make a new offer.
Earlier this month, around the same time MGM Resorts announced its offer for Entain, Entain made proposed a takeover offer for Baltic-based gambling operator Enlabs AB for SEK 2.8 billion (Around $336.3 million).
As reported earlier this month, Shay Segev, the CEO at Entain, said of the proposal: “The acquisition of Enlabs is perfectly aligned with our strategy of expanding across new regulated international markets. We are hugely excited by the growth opportunities it presents both in its existing markets and through new market opportunities.”
Although the offer, which includes Enlabs brands Optibet and Laimz, was recommended by the board of Enlabs with shareholders holding 42% of the company accepting the bid, shareholder and Texas hedge fund Alta Fox Capital Management, which owns more than 2,000,000 shares representing 3% of the company, says it has no plans on selling shares to Entain at its current offering.
Alta Fox has said that the Entain has “materially undervalued the company” with its offer and has questioned why Enlabs chairman Niklas Braathen, who serves as Enlabs’ largest shareholder, has accepted the “inadequate” offer.
Alta Fox, who has described the proposal as a “bad deal for minority shareholders”, has expressed concern that Braathen may be offered an executive position following the takeover. The hedge fund has said that all shareholders must be compensated and claims to have support from around 11% of those holding a stake in Enlabs.
In a statement to Gambling Insider, Alta Fox said: “Alta Fox confidently believes we have the support to block a squeeze-out of minority shareholders, legal counsel to ensure their fair treatment under Swedish law, and the determination to obtain a fair price that is reflective of Enlabs’ standalone growth prospects.”
Enlabs decision to reject the offer comes after the betting operator voluntarily revoked its Swedish gambling and betting licenses over plans to implement the popular Pay & Play solution and launch several new gambling brands by the summer of 2021.
Meanwhile, gambling operator 888 Holdings has announced a multi-year extension to its B2B poker partnership with Las Vegas-based casino operator Caesars Interactive Entertainment.
As reported by Proactive Investors, the UK gambling operator will under the agreement continue to provide Caesars Interactive Entertainment with the technology for its World Series of Poker (WSOP) branded online poker rooms.
Yaniv Sherman, the Head of US at 888, said in a statement: “Our partnership with Caesars has been powering the hugely popular WSOP brand online since 2013 and we are looking forward to continuing this relationship for many years to come.
“Our extended relationship will also enable 888 to gain a presence in new US states following the required regulatory approvals, which presents an important opportunity in our long-term development strategy for the US market.”
Ty Stewart, the Executive Director at WSOP, added: “We’re proud of the success story to date, particularly the record-setting tournament events of 2020, and are optimistic about the future of real money online poker in the US.”
The news comes shortly after Caesars Entertainment announced a £2.9 billion takeover of British bookmaker William Hill. The acquisition is expected to complete in March 2021 subject to all necessary approvals from regulatory bodies.
