DraftKings Drops Out of Entain Acquisition Talks
Talks on a possible acquisition of Entain by DraftKings have fallen through as the latter drops out of the pursuit.
Last month the behemoth sportsbook brand, DraftKings, made two proposals to Entain. The first was a £25.00 per share offer comprising both cash and stock. This was rejected by Entain’s board, after which DraftKings came up with a higher offer of £28.00 per share, also comprising cash and stock.
All that was left was for the sports betting provider to make a firm offer, which according to the latest reports, they have decided against. In the announcement, DraftKings chief executive Jason Robins said, “after several discussions with Entain leadership, DraftKings has decided that it will not make a firm offer for Entain at this time.”
This would not be the first Entain takeover attempt making headlines. Earlier in the year, the company rejected an $11bn bid from its US-facing BetMGM partner, MGM Resorts International, claiming that the offer undervalues the business.
The second proposal by DraftKings valued the business at a whopping £16.40bn (€19.23/$22.40bn). Although talks have ended for now, DraftKings said it may ultimately opt to make a bid again under certain conditions, such as a “material change of circumstances.”
Upon the announcement, Entain’s share price dropped from £21.50 per share at 12:30 pm on 26 October to £19.30 at 1:00 pm.
Each Confident In Its Brand
Robins went on to state that DraftKings was confident about its technology and market prowess. He said, “based on our vertically-integrated technology stack, best-in-class product, and technology capabilities and leading brand, we are highly confident in our ability to maintain a leadership position and achieve our long-term growth plans in the rapidly growing North America market.”
The board of operators at Entain also had a lot to say about the company’s prospects.
“Entain has an outstanding track record of growth, having delivered 23 consecutive quarters of double-digit online NGR growth, representing a three-year CAGR of 19% across 2021.”
The potential for its total addressable market is expected to grow by more than three times to $160bn. This includes its leadership position in North America thanks to its partnership with US casino corporation MGM in the BetMGM gaming business.
“Therefore, the board is confident in Entain’s ability to continue delivering material value for its shareholders.”
Entering New Markets
Amid the takeover talks with DraftKings, Entain completed the acquisition of Unikrn, a leading esports betting operator offering real-money and play-for-fun wagering.
While talking up its future prospects, Entain’s board mentioned that the brand is focusing on further strengthening its market positions, US expansion, and growth in newly-regulated markets. It will also expand into new interactive entertainment experiences such as esports and use its broad product range to enhance customer acquisition and retention and boost player loyalty.
According to Justin Dellario, former Managing Director of Esports at Twitch who will now be spearheading Entains global launch, “Entain is all about creating exciting and innovative products for our customers,” said Bellisario. “With Unikrn, we’ll now be able to offer competitive gamers and esports fans alike rewarding experiences surrounding the games and events they love.”
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