MGM wants to buy the owner of Ladbrokes

The exact details and value of the new offer couldn’t be traced, but it is above £ 12.85 – or $ 17.56 at current exchange rates – a stock that MGM had offered late last year, people said. There is no guarantee that Entain will be open to the new offering or that a deal will come.

A combination could create one of the few major gaming companies in the world with a significant online and physical presence. It would follow another recent consolidation in the industry.

Like his colleagues, MGM was under pressure when the coronavirus pandemic kept its largest money producers – casinos and hotels on the Las Vegas Strip – closed or operating at greatly reduced capacity for much of the year.

The online gaming market was already booming before the pandemic gave an extra boost. That has pushed casino operators like MGM to run their business even faster than planned, often through partnerships and acquisitions.

MGM currently derives a small portion of its revenue from online betting, which casinos have long viewed as a threat but increasingly see it as an opportunity as people at home stay socially at a distance and the pandemic keeps gamblers away from slot machines and blackjack tables. The trend towards online gambling is not expected to reverse any time soon.

Entain, known until recently as GVC Holdings, is one of the largest gaming companies in the UK after it closed a roughly $ 5 billion deal that put Ladbrokes under its roof in 2018. The stock rose recently when the pandemic put online gaming at the center. Las Vegas-based MGM has a market value of approximately $ 16 billion and is best known for its casino properties, including the Bellagio and Mirage.

Barry Diller’s internet conglomerate IAC became MGM’s largest shareholder in August, disclosing an approximately 12% stake, which was then valued at approximately $ 1 billion. It said at the time that it planned to work with the company to expand its online gambling business. Mr. Diller, IAC’s Chairman, and Chief Executive Joey Levin have also joined MGM’s board of directors.

Another top shareholder, Corvex Management LP, also has a seat on the board of activist hedge fund founder Keith Meister.

Caesars Entertainment Inc.

CZR 0.79%

recently struck a deal worth about $ 4 billion to buy UK-based William Hill WMH 0.30%

PLC, which already has a joint venture with the MGM rival. Caesars shareholders applauded the deal, with the shares ending at about 25%. The transaction will close in March.

Investors, meanwhile, are piling up in companies with the potential to become major players in the growing online gambling market, especially in DraftKings US stock prices. Inc.

DKNG -4.88%

and Penn National Gaming Inc.,

PENN -0.83%

for example, in 2020 it increased by nearly 340% and 240%.

DraftKings went public in April through a transaction with a blank check company and a merger with a small gambling technology provider at the same time. Penn National took a significant stake in cornered Barstool Sports Inc. in early 2020. in a deal that gave it exclusive rights to use the media company’s brand in its sports betting.

MGM’s shares ended the year at about 5% while Entain closed about 30%, possibly as a nod to its potential as a takeover target.

The MGM and Entain management teams already have a bond. Since 2018, they have become exclusive partners on BetMGM, a small but growing online gaming company that both parties recently provided additional funding. BetMGM, which uses Entain’s technology and MGM’s licenses and brands, operates in more than 10 states, including Nevada, New Jersey and Indiana. There are more than 20 plans by the end of this year.

Write to Cara Lombardo at [email protected]