The board has also asked [MGM] to provide additional information regarding the strategic rationale for a combination of the two companies, “said Entain. The UK company has received multiple proposals from MGM, the statement suggested. MGM representatives did not immediately respond to a request for comment.
Shares in Entain are up more than 26% on Monday, rising above the price per share offered by MGM, as a sign that some investors are expecting a different offer from the US company or another bidder. MGM is a major player in Las Vegas, operating casinos including Bellagio and Mandalay Bay.
The companies have an existing relationship. MGM and Entain are joint owners of BetMGM, a sports betting and online gambling company that operates in more than a dozen US states. Entain, owner of brands such as Eurobet, Ladbrokes and Sportingbet, operates both retail and online businesses.
Nicholas Hyett, an equity analyst at Hargreaves Lansdown, said he “understands why MGM wants to take control of Entain,” as the two companies are already collaborating on sports betting in the United States. But he warned that a higher price “may be too expensive for MGM shareholders to swallow.”
MGM shares fell 0.3% in premarket trading Monday.
Sports betting tree
The online sports betting industry was already growing in the United States following a 2018 U.S. Supreme Court decision that paved the way for legalization in states outside of Nevada. The American Gaming Association expects nearly 35 million people, or 13% of American adults, to bet on the 2020 NFL season.
The pandemic has only accelerated the trend and sparked a wave of deal-making and consolidation.