BY Richard Summerfield
US fantasy sports and gambling company DraftKings has confirmed that, following further analysis and discussions with the Entain board of directors, it will not make a firm offer for the company.
In September, Draftkings first declared its interest in a takeover and had until 16 November to make a ‘put up or shut up’ offer for Entain after being granted a one-month extension last week by the City’s Takeover Panel. Under the City’s takeover rules, Draftkings cannot return with a new offer for Entain for six months.
Following the effects of the coronavirus (COVID-19) pandemic and the relaxation of sports betting laws in the US, Entain has seen immense growth in its online revenues in recent years. Accordingly, the company has attracted interest from several parties. Earlier this year, Entain rejected an approach from MGM Resorts International. Draftkings offered £25 per share for the company, though that was rejected for being too low. It then upped the proposal to £28 per share, or $22.4bn, which represented a 43 percent premium over the company’s stock price.
“After several discussions with Entain leadership, DraftKings has decided that it will not make a firm offer for Entain at this time,” said Jason Robins, chief executive, co-founder and chairman of DraftKings. “Based on our vertically-integrated technology stack, best-in-class product and technology capabilities and leading brand, we are highly confident in our ability to maintain a leadership position and achieve our long-term growth plans in the rapidly growing North America market.”
Entain’s board said it remains focused on executing its growth and sustainability strategy. In a statement, the company said: “The board strongly believes in the future prospects of Entain, underpinned by its leading market positions, world class management team and industry-leading proprietary technology. Entain has an outstanding track record of growth having delivered 23 consecutive quarters of double digit online NGR growth.”
While neither firm explained in any significant detail the main reasons behind the deal’s collapse, Entain’s joint venture with MGM in the US, BetMGM, may have made the likelihood of a transaction more complicated.
Interest in UK bookmakers has grown markedly in recent years. In 2020, Las Vegas casino firm Caesars Entertainment agreed to acquire William Hill for £2.9bn.
News: Ladbrokes owner Entain's shares tumble as Draftkings drops $22bn offer