MGM Abandons Entain Takeover Bid
MGM Resorts International (NYSE: MGM) has announced that it will not be submitting a revised offer for Entain Plc (LON: ENT) following the rejection of its previous bid.
The announcement will put to end weeks of speculation about the proposed takeover. The initial offer was 0.6 MGM shares for each Entain share, which represented a value of 1,383 pence per share and a premium of 22% to the company’s share price.
When the takeover bid of $11 billion was made, Entain’s board immediately rejected it, and Chairman Barry Gibson said that it “significantly undervalued the company’s future growth and prospects.”
However, the CEO of MGM Resorts International, Bill Hornbuckle, made it clear that the companies will continue to work together. He said that their sports betting and online gaming ventures with Entain remain “a key priority for the company” as they seek to expand online. He went on to say that MGM remains “committed to working with Entain” and added that they expect to be operational in 20 states by the end of this year.
Speculation about the takeover only grew when it was announced that Shay Segev has resigned as CEO of Entain. The announcement from MGM saw Entain’s share prices drop by 16%.
In response to the announcement from MGM, Entain released the following statement:
“The Board of Entain plc notes the announcement made earlier today by MGM Resorts International that it does not intend to make an offer for Entain. As a result of the announcement, MGMRI and its concert parties are bound by the restrictions contained in Rule 2.8 of the City Code on Takeovers and Mergers.
Entain has a clear growth and sustainability strategy, backed by leading technology, that it is confident will deliver significant value for stakeholders. We look forward to continuing to work closely with MGMRI to drive further success in the US through the BetMGM joint venture.”
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