‘The board also asked [MGM] to provide additional information regarding the strategic rationale for a combination of the two companies, “Entain said. The UK company has received several proposals from MGM, according to its statement. for comment.
Shares in Entain rose more than 26% on Monday, rising above the price per share offered by MGM, 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 and operates casinos, including the Bellagio and Mandalay Bay.
The companies have an existing relationship. MGM and Entain are co-owners of BetMGM, a sports betting and online gaming company operating in more than a dozen US states. Entain, which includes brands including Eurobet, Ladbrokes and Sportingbet, operates retail and online businesses.
Nicholas Hyett, a stock analyst at Hargreaves Lansdown, said he “can understand why MGM wants to take control” of Entain, as the two companies are already working together on sports betting in the United States. But he warns that a higher price ‘could be too much for MGM shareholders to swallow’.
MGM shares fell 0.3% in pre-trading on Monday.
Sports betting boom
The online sports betting industry has already grown in the United States following a 2018 U.S. Supreme Court ruling 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 only accelerated the trend, fueling a spate of transactions and consolidation.