British gambling company Entain said Tuesday that US fantasy sports betting company DraftKings had offered a $ 22.4 billion acquisition.
Under the current proposal, DraftKings will offer £ 28 per share, which is equivalent to a premium of 46.2% of the UK company’s closing price on Monday. Entain said it had previously rejected DraftKings’ offer to buy the company for £ 25 per share ($ 34.15).
Entain’s stake closed 18% as both companies confirmed their approach. This will give US companies access to Ladbrokes Poker and win’s online betting brands. DraftKings shares closed down 7.2% to $ 52.77 and then fell 0.6% in expanded trading.
DraftKings’ takeover offer said it underestimated the company after Entain rejected a $ 11 billion offer from U.S.-based MGM Resorts International in January, but analysts said MGM was more We have accumulated a lot of cash and expect to come back with a new bid.
According to RBC Capital Markets, Enterne and MGM already have a joint venture called BetMGM. This is an online sportsbook for betting on NFL and NBA games, dominating about 21% of the market against 17% of DraftKings.
Transactions in which Enterin owns a competing business in the United States will require MGM’s consent, MGM said Tuesday in response to DraftKings’ approach.
Trading enthusiasm in the field of online gambling occurs as local operators seek to expand and capture opportunities in states across the United States that are open to sports betting.
In a cross-Atlantic transaction, Caesars Entertainment acquired William Hill, a traditional rival of the Ladbrokes brand of Entertainment, for £ 2.9 billion earlier this year. Caesars sells William Hill’s non-US assets.
Demand for online betting surged during the pandemic as customers went to play from home when casinos and bettors were off limits.
DraftKings, which allows users to participate in daily and weekly fantasy sports-related contests, has confirmed that it is approaching Entain, but has not provided additional details. Last month, it acquired rival Golden Nugget Online Gaming Inc for a $ 1.56 billion all-stock transaction.
According to Enten, DraftKings had to make a firm proposal to the company until October 19.
($ 1 = 0.7322 pounds)
By Subrat Patnaik and Nivedita Balu