MGM Resorts Raises Entain Bid to More Than $10 Billion
MGM Resorts Raises Entain Bid to More Than $10 Billion
(Bloomberg) -- MGM Resorts International increased its offer for online-betting partner Entain Plc to more than $10 billion, according to people familiar with the bidding.
The amount tops an earlier all-cash bid made late last year, said the people, who asked not be identified because the negotiations are still private. A spokesman for MGM declined to comment, while Entain didn’t immediately respond to an email after regular business hours.
MGM, the largest casino operator on the Las Vegas Strip, formed a joint venture in 2018 with Entain, formerly known as GVC Holdings Plc, to capitalize on the growth of online betting in the U.S.
The partnership got off to a slow start as the venture had some disagreements over strategy. A merger would consolidate control of the company’s online betting operations at a time when the industry is seeing dramatic growth. The U.S. sports betting market alone is expected to quintuple in size to $8.4 billion by 2024, according to the consulting firm Vixio Gambling Compliance.
The talks are still ongoing and may not lead to a transaction, the people said. The Wall Street Journal reported on the deal earlier.
Entain shares jumped 28% last year, giving it a market value of 6.6 billion pounds ($9.1 billion). MGM shares fell 5.3% in 2020.
Betting Boom
In 2018, the U.S. Supreme Court said states outside of Nevada could offer sports betting if they choose. Nineteen states now do so and it’s been approved in six others, according to the American Gaming Association. The U.S. sports betting market alone is expected to quintuple in size to $8.4 billion by 2024, according to the consulting firm Vixio Gambling Compliance.
Entain, headquartered on the Isle of Man, has grown dramatically in recent years, including the acquisitions of online operator Bwin.Party and famed British bookmaker Ladbrokes.
The casino industry has seen a surge of partnerships and mergers as online betting grows in the U.S. Las Vegas rival Caesars Entertainment Inc. is in the process of acquiring British bookmaker William Hill Plc, its partner in sports betting.
MGM, despite the steep drop in its casino business due to Covid-19, is flush with cash after a series of asset sales in recent years. It also has a strategic shareholder in Barry Diller’s IAC/InterActiveCorp., pressing for a bigger presence in online betting.
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