Final call: DraftKings decides today whether to formally bid for Entain

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uesday is decision day for DraftKings. The company will determine whether to make a formal offer for Entain, and potentially kick off a $22-billion+ bid battle for the British gambling firm. 

The company’s latest proposal offered Entain 2,800 pence per share, consisting of 630 pence in cash and the balance payable in new DraftKings Class A common shares. 

Entain also revealed that DraftKings proposed that the exchange ratio was to be fixed immediately prior to the first agreed public announcement. 2,800 pence per Entain share represented a premium of 46.2% to Entain’s closing share price on September 20, 2021.

In late September, a day later after DraftKings confirmed having made an acquisition proposal to Entain for $22.4 billion, the British brand’s shares rose by 17% in London trading. 

Not long after, during an interview at the Global Gaming Expo in Las Vegas, Bill Hornbuckle, MGM’s CEO, hinted at a potential buyout of BetMGM, currently co-owned and operated with Entain, and pointed out that there are many strategies to get to a potential agreement between MGM, DraftKings and Entain to work. MGM failed in its attempt to buy the owner of Ladbrokes and Coral betting shops earlier this year. 

Hornbuckle also noted that any deal that would make Entain a competitor in the United States would require its consent. He also made clear that he will pursue a majority takeover of BetMGM in the event that DraftKings successfully purchases the British brand. 

If DraftKings were unable to make a firm offer but is reluctant to give up on its attempt altogether, there could be a situation akin to security firm G4S whose takeover deadline was extended repeatedly before U.S. group Allied Universal beat out rival bidder GardaWorld.

Since the US opened up to sports betting, these sorts of deals have been picking up. Takeover battles for British companies have heated up in recent years as Brexit and the COVID-19 pandemic struck valuations, and a number of deals have received takeover deadline extensions.