what happened
Shares of MGM Resorts International (NYSE: MGM) closed nearly 6% on Monday after a joint venture partner revealed that MGM wanted to acquire it.
Approximately
MGM Joint Venture (JV) Omhul (LSE: ENT) revealed today that MGM has made a $ 11 billion acquisition offer. MGM and Entain – formerly known as GVC Holdings – are partners in the BetMGM sports betting and online casino app. Entain said the offer, which represents a 22% premium to last week’s last share price, “significantly underestimates the company and its prospects.”
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Now what
Entain has confirmed that it has received several offers, and it looks like MGM wants to make the purchase. The drop in today’s share price indicates that investors in MGM are betting that the company will once again increase its offering for Entain, which also owns the British gambling brands Ladbrokes and Eurobet, among others. MGM’s offers follow Caesars Entertainment merged with Eldorado Resorts last year and announced plans to acquire a UK-based oddsmaker William Hill in a transaction of almost $ 4 billion.
Launched in 2018, BetMGM offers sports betting and online casino gambling using Entain’s technology and MGM’s casino brands. BetMGM today announced its launch in Iowa, marking the expansion to its eighth U.S. state.
As MGM awaits a complete overhaul in its brick-and-mortar casinos, BetMGM is a business that helps stimulate growth. In addition to launching in countries that have legalized legal sports betting, BetMGM has also added new partnerships with various professional sports teams. Long-term investors in MGM should view today’s decline as an opportunity, but expect the casino operator to increase its offering to try to get a growing segment fully under its corporate umbrella.