American betting group DraftKings is apparently dead serious about wanting to acquire Entain and has put up a package valued at $20 billion in an attempt to scoop up the company.
Entain currently has a 50/50 partnership with MGM for American online betting interest, with the latter also trying to purchase the online gaming giant's stake in the American venture. Earlier this year MGM put up an $11 billion offer for the company, which was rejected. DraftKings' offer would be a combination of cash and stock and would be for Entain as a whole, including assets outside of the United States.
Such an agreement would have major roadblocks, the least of which would be getting MGM's approval of such a deal, as the joint venture between the two in the States gives them a large say about what happens. Conversely, the offer could end up being made for just Entain's non-American assets, as the company is seen as one of the betting industry's largest global brands.
Gaming industry analyst Barry Jonas had a lot to say about the proposed deal, including what DraftKings could be thinking with a purchase offer. "It would accelerate a move to profitability, helping fund growth with international cash flow," he said. "Still, it's unclear to us how the market would value a more complex DraftKings/Entain new company with the majority of revenue coming from Entain and its relatively lower-growth international markets. We believe much of DraftKings premium valuation today is based on its U.S. pure-play/higher-growth status. Assuming a deal materializes, we await more information on DraftKings' strategy."
Without a doubt, this is a seismic offer, and there's going to be a lot of discussion going forward. Casino Listings News is following developments closely and will update readers as we learn more