One by one, like ducks in a row, our American friends are targeting iconic British betting brands in a bid to buy their way out of Covid-induced retail market depression and supercharge their scramble for online gaming riches.
Although the biggest online sports betting operator in the US, DraftKings has yet to turn a profit and is reputedly losing a cool US$3.5 million a day (£2.57m/€2.98m).
Now it sees market salvation by launching an aggressive £16.4 billion (US$22.36bn/€19.06bn) takeover bid for the UK’s FTSE100 Entain Group Plc, formerly GVC, owners of Gala, Coral and Ladbrokes, among many other top gaming brands.
This week, beginning September 20–perhaps in a canny, suck-it-and-see bid to drive-up an initial offer—Entain confirmed market rumours that Boston-based DraftKings had made the audacious move.
DraftKings’ speculative opening salvo very much looks like it’s been modelled on the recent Caesars Entertainment £2.9 billion takeover of William Hill; whereby the American predator will asset strip Entain’s multi-platform ventures.
Founded in 2012, DraftKings, who are locked in a fierce rivalry with FanDuel for domination in the US’s booming online betting sector, has valued Entain at £28-a-share, the equivalent of £16.4 billion.
Meanwhile, American monolith MGM Resorts has confirmed that it is involved in the DraftKings bid.
Reports say that DraftKings would acquire Entain’s non-American assets, including its 3,357 high street betting shops (as of 2019); while MGM would buy-out Entain’s half share of their current BetMGM-Entain iGaming joint venture in the US.
Earlier this year Caesars Entertainment’s long-running pursuit of William Hill was finalised and this October US Bally’s £2 billion (US$2.73bn/€2.32bn) acquisition of the Gamesys Group, owners of the Jackpotjoy and Virgin Games brands, is also set for completion.
“MGM will engage with Entain and DraftKings, as appropriate, to find a solution to the exclusivity arrangements which meets all parties’ objectives,” the corporate giant has said in a statement.
Entain, for its part, has confirmed: “The board has received a proposal from DraftKings to acquire Entain, the consideration for which would include a combination of DraftKings stock and cash.
“There can be no certainty that any offer will be made for the company, nor as to the terms on which any such offer may be made.
“The Board of Entain will carefully consider the proposal and a further announcement will be made as and when appropriate. Shareholders are urged to take no action at this time.”
Your starter for £16.4 billion. The feeding frenzy is on.