Yahoo Finance Americans place £16bn wager on Ladbrokes owner
The bookmaker behind some of Britain’s best-known gambling brands is in talks about a £16bn takeover by Draftkings, the loss-making US sports betting company.
Entain, whose betting operations include Ladbrokes, Coral and Gala, confirmed it had received an approach from DraftKings which valued the FTSE 100 bookmaker at £28 a share or £16.4bn in total.
It is understood that DraftKings would buy Entain’s non-US assets - including its 1,500 betting shops - leaving MGM Resorts to buy Entain’s 50pc share of its American joint venture.
The move marks the latest escalation in a race to conquer America as the country relaxes a longstanding ban on sports and online gambling.
William Hill was bought by MGM rival Caesars Entertainment for £2.9bn earlier this year. FTSE 250-listed rival Gamesys Group, the company behind Jackpotjoy and Virgin Games, agreed to a £2bn takeover by Bally’s, another US firm.
The deal would pave the way for MGM to seize control of American joint venture BetMGM, after failing to acquire it in January as part of a wider £8bn deal to buy Entain.
MGM confirmed on Tuesday that it was part of the takeover talks. It said: “MGM will engage with Entain and DraftKings, as appropriate, to find a solution to the exclusivity arrangements which meets all parties' objectives.”
DraftKings, meanwhile, is believed to be interested in Entain’s technology and its non-US brands, including the websites bwin and partypoker.
Formed less than a decade ago, DraftKings has yet to turn a profit and is losing about $3.5m a day.
However, investors on the other side of the Atlantic believe it is well placed to capitalise on what will be the biggest regulated gambling market, with large marketing costs required to attract new gamblers.
Entain said: “The board of Entain confirms that it has received a proposal from DraftKings to acquire Entain, the consideration for which would include a combination of DraftKings stock and cash.
“There can be no certainty that any offer will be made for the company, nor as to the terms on which any such offer may be made.”
Shares in Entain, formerly known as GVC, closed 18pc higher at £22.61.
James Wheatcroft, an analyst at stock broker Jefferies, said: “Both BetMGM and the non-US facing business that ENT has a long runway for growth ahead, supported by differentiated, proprietary tech. We therefore think current Entain investors will likely have high multiple aspirations when thinking about the take-out of Entain.”
