US casino giant MGM Resorts has become the latest Stateside firm to try and tap into the UK market with an $11 billion (£8.1 billion) bid for the owner of Ladbrokes.
The offer – which Entain said “significantly undervalues” it – is seen as a move by the casino company to help rapidly expand its sports betting business.
Shares in Entain PLC, which is listed on the FTSE 100 and recently changed its name from GVC Holdings, were up around 29 per cent today at £14.63 on the back of the news.
It comes after a period of rapid growth for the sports betting and online gambling industries in the US.
MGM’s casino-owning rival Caesars made its own move into the area recently by buying UK betting giant William Hill. Shareholders approved Caesars’s £2.9 billion bid in November, in a move which is expected to complete by March.
Entain is one of the world’s biggest sports betting and gaming groups, and owns brands including bwin, Coral, Crystalbet, Eurobet, Ladbrokes, Neds, Sportingbet, CasinoClub, Foxy Bingo, Gala, Gioco Digitale, partypoker and PartyCasino.
In a response to press speculation about the offer, the Entain board confirmed it had been approached by MGM Resorts International (MGMRI), which is already its partner in the US market.
Under the terms of the proposal, Entain’s shareholders would own 41.5 per cent of the enlarged MGM Resorts group – although a “limited partial cash alternative” would also be on the table.
In a statement Entain said: “Entain has informed MGMRI that it believes that the proposal significantly undervalues the company and its prospects.
“The board has also asked MGMRI to provide additional information in respect of the strategic rationale for a combination of the two companies.
“A further announcement will be made as appropriate. In the meantime, Entain shareholders are encouraged to take no action.”
It added: “There can be no certainty that any offer will be made for the company, nor as to the terms on which any such offer might be made.”
Entain said under City trading rules any updated offer must be made no later than 5pm on February 1.
