That’s a serious offer
The financial markets were abuzz on Tuesday with the news that daily fantasy sports and sports betting giant DraftKings has made a $20 billion offer to acquire UK-based gambling company Entain. According to CNBC, the offer is in both stock and cash, but mainly the former.
The Entain name in and of itself is not necessarily top of mind for most poker players, but the company is a heavyweight in the industry. Among the brands it owns includes partypoker, bwin, Ladbrokes, Coral, Sportingbet, and many more in the sports betting, online casino, and online bingo spaces.
MGM would get a say
Entain also owns half of US-facing sports betting company BetMGM with MGM Resorts International. MGM is not involved in DraftKings’ offer, but did comment:
Any transaction whereby Entain or its affiliates would own a competing business in the U.S. would require MGM’s consent. MGM will engage with Entain and DraftKings, as appropriate, to find a solution to the exclusivity arrangements which meets all parties’ objectives.
Entain has confirmed that DraftKings has put in a bid, but did not offer up any details or any dollar figures, except that it is for a combination of stock and cash. According to the rules for publicly listed companies in the United Kingdom, DraftKings has until October 19 to make its formal offer. DraftKings itself has not said anything about the proposal.
MGM tried to buy Entain earlier this year for $11 billion, but Entain rejected it based on price. One would think the new $20 billion offer from DraftKings is much closer to what Entain had envisioned, but we shall see.
Entain shares jumped on the news, closing Tuesday up 18%. DraftKings shares fell more than 7%, but that is normal for the acquiring company.
DraftKings keeps dealing
DraftKings has been busy in the past year-plus. In April 2020, it went public via a merger with Diamond Eagle Acquisition Corporation (DEAC) and SBTech. DEAC was a special purpose acquisition company (SPAC), whose sole reason for existing was to buy a private company to take public. DraftKings went this route to make the process of going public faster than the normal IPO strategy.
Going public has given DraftKings the financial clout to make further moves to grow its business. In August of this year, it agreed to buy Golden Nugget Online Gaming (GNOG), which also went public through a SPAC, for $1.56 billion. Tilman Fertitta, owner of GNOG, became one of DraftKings’ largest shareholders and gained a seat on the company’s board of directors.
The exact reasons that DraftKings is looking to buy Entain are not known. It was thought that it bought GNOG mainly for its customer database, but Entain has many more gaming assets, including, as mentioned, partypoker. It is hard to see DraftKings suddenly getting into the online poker business, but you never know with these sorts of things.
