Flutter Shows Interest in Joining Boyd for Penn Interactive Acquisition

Flutter Entertainment, the parent company of FanDuel, is reportedly considering a partnership with Boyd Gaming to acquire Penn Interactive, the interactive assets of Penn Entertainment. This development, reported by TheDeal.com on July 5, comes from unidentified sources, and adds a new dimension to the ongoing discussions surrounding Penn's digital assets.

The Flutter logo on a sign in its offices. Source: Flutter Entertainment)

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The speculation surrounding Penn Interactive's potential acquisition began in late May when the Donerail Group, an activist investor, addressed a letter to Penn Entertainment's board. The letter highlighted a concerning 80% decline in Penn's stock over the past three years, suggesting that strategic changes were necessary. This critique sparked widespread interest and debate within the investment community about the future direction of Penn's digital and interactive gaming assets.

Related: Boyd Gaming Interested in Purchasing Penn Entertainment

In June, Truist Securities added fuel to the fire by publishing a report that deemed Penn's stock undervalued, setting a target share price between $23 and $25. At the time of the report, Penn's stock was last seen in this price range in February, indicating a potential for recovery and growth that could be leveraged through strategic partnerships or acquisitions. This analysis positioned Penn as an attractive target for potential buyers, including Boyd Gaming and Flutter Entertainment.

Boyd Gaming reportedly made a takeover bid for Penn valued at over $9 billion, according to a recent Reuters report. Despite the substantial offer, several investment banks have expressed skepticism about Penn's interest in the deal, citing significant hurdles that could complicate any acquisition attempts. These hurdles include regulatory approvals, market conditions, and the strategic fit of Penn's assets with potential acquirers.

Neither Flutter nor Penn Entertainment has commented on the speculation, maintaining silence as acquisition rumors intensify.

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Changing the Game

The potential partnership between Flutter and Boyd Gaming to acquire Penn Interactive could create a formidable force in the digital gaming market. Flutter, one of the leading online sports betting and casino platforms in the US and globally, would benefit significantly from Penn Interactive's assets. Such a partnership would enhance Flutter's market position and expand its footprint in the competitive digital gaming landscape.

The upcoming earnings reports from Boyd Gaming, Penn Entertainment and Flutter Entertainment are likely to shed light on the feasibility and strategic direction of this potential acquisition. Boyd Gaming is scheduled to release its second-quarter earnings on July 25, followed by Penn on August 8, and Flutter on August 13.

Particularly of interest will be Penn's earnings call, which will provide updates on the performance and strategic initiatives of ESPN Bet, Penn's collaboration with ESPN aimed at capturing a larger share of the digital gaming market. The success and trajectory of ESPN Bet could play a critical role in Penn's valuation and attractiveness to potential acquirers like Boyd Gaming and Flutter Entertainment.


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