Sharepartypoker’s parent company have seen share prices soar on the back of turning down a mammoth $11.06billion (£8.09billion) buyout offer from fellow gambling giants MGM Resorts International…
Entain plc, formerly known as GVC Holdings and which counts partypoker, Bwin, Coral, Ladbrokes and Sportingbet among its brands, saw its share prices rise almost 30% on the back of the rejected offer.
The bid for control of the FTSE100-listed company saw MGM offer 0.6 of their shares for each Entain share, which would leave the British firm with just over 40% share equity after the proposed merger.
However, stating that they felt the offer “undervalued” the company, Entain also questioned MGM’s approach for other reasons, asking them to, “provide additional information in respect of the strategic rationale for a combination of the two companies.”
That was soon forthcoming from the US-based global hospitality and entertainment company that includes casinos such as the Bellagio, Mandalay Bay and MGM Grand in its portfolio.
MGM stated in a press release that they believe, “both its proposal and the strategic rationale for the combination are compelling,” adding that “a combination with Entain” would provide the following:
- Deliver full control of the BetMGM business to leverage the rapidly growing U.S. iGaming and sports betting opportunity
- Ä‘Position the Company as a global gaming company across both online and retail with a leading end-to-end technology stack
- Expand and diversify the Company's operations, product offerings and earnings
- Position the combined Company for future growth and investment by leveraging its leading brands, leading technology platform and strong balance sheet
That BetMGM is one of the main factors underpinning the offer is hardly surprising, given that the joint venture between the two companies has shown such promise.
Entain CEO Shay Segev stated last month: “We are firmly on track to be the leading operator in the US as well as in many other newly regulated markets that are now opening around the world.”
That was on the back of BetMGM doubling its population to 75million across 12 states, with another eight states expected to be added in 2021, all powered by Entain technology.
Segev added: “In the US, we invested in building the right building blocks for the BetMGM platform to grow and become a long-term leader in the US, with superior technology and capabilities, and this is now paying off.”
What happens next is unclear, although MGM coming back with a revised offer could see share prices substantially affected yet again, the spinoff effect also inflating other gaming company shares this week.
