MGM Resorts International bid for Entain is shaping up, with everything starting as a rumor first reported by the Wall Street Journal (WSJ).
Following reports on Sunday, Entain and MGM Resorts both hurried to confirm the news, acknowledging that a proposal for a merger has been extended at a 22% premium on Entain's last trading price at the time of the proposal.
According to WSJ, MGM used the December 31 2020 pricing of Entain's stock, putting the value of the company at over $10 billion.
Entain's official response said that a proposal has been made. The company, however, felt that MGM Resorts had “undervalued” its assets, and queried the rationale behind the move.
MGM Resorts has responded that the rationale made sense to the company as it would merge two behemoths that would continue working together in the US and globally, leveraging brands, technology, and raising capital together.
However, the company did caution that there was no official confirmation of an offer, and one may never come. The proposal, MGM Resorts said, was a way to feel the soil and see if Entain would be open to a deal.
The benefits for both companies could be huge. They already operate Roar Digital, a joint venture that is running the BetMGM brand and has been posing a serious challenge to other established players, such as DraftKings and FanDuel.
A closer partnership between MGM and Entain could lead down a new and interesting path, such as crypto. Many companies have already successfully leveraged crypto technologies in betting and gaming, including Bitcasino, FortuneJack, and 1xBit.
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