MGM Resorts International has revealed it will not make a firm offer to acquire Entain.
Today, MGM Resorts International revealed it does not intend to submit a revised proposal or make a firm offer to acquire its US sports betting partner Entain.
MGM will not make a firm offer
In its announcement, the US land-based casino giant said that after “careful consideration” it will not make a revised bid to acquire the UK-based operator or make a firm offer.
According to Rule 2.6(a) of the City Code on Takeovers and Mergers, MGM had until 5pm on 1 February to make a firm bid or announce it did not intend to make an offer.
At the start of January, the UK-based operator revealed that MGM Resorts put forward a proposal to acquire the Ladbrokes operator with 0.6 MGM shares for each share in Entain. Based on closing prices from 31 December 2020, this would amount to 1,383 pence per Entain share and would value the business at $11bn (£8.11bn).
Entain rejected the initial offer on the grounds that it significantly undervalued the business.
Shortly after this, MGM’s largest investor offered to put in $1bn to get the deal with Entain done.
Both businesses have indicated that the failed takeover attempt will not impact their ongoing BetMGM joint venture in the US.
MGM and Entain’s BetMGM joint venture
MGM Resorts and Entain have worked closely together since July 2018 when they entered into a 50-50 joint venture to form the US-focused online gambling brand BetMGM.
Both companies intended to capitalise on sports betting and online gambling opportunities in the US via the joint venture.
In July 2020, both operators committed to a second round of investment in BetMGM which brought the partners’ total investment in BetMGM to $450m.
When Entain revealed MGM’s take over bid, MGM said that the deal would have allowed the combined entity to accelerate BetMGM’s US growth.
Bill Hornbuckle, CEO of MGM Resorts International said: “BetMGM, our US sports betting and online gaming venture with Entain, remains a key priority for the Company as we continue to leverage our preeminent physical gaming, entertainment, and hospitality platform to expand digitally.
“We believe that BetMGM has established itself as a top-three leader in its markets and we remain committed to working with Entain to ensure its strong momentum continues as it expects to be operational in 20 states by the end of 2021.”