Jonathan Thomas 
The stock price rose on speculation that the American casino niopla MGM Resorts and its partner, US joint venture BetMGM, had prepared an offer for the company after an offer of 1.1 billion dollars (about 7.9 billion euros) from the latter earlier this year. However, DraftKings US suitors came armed with a soaring share price and were determined to spend big to grab market share. Entains shares jumped 18% as the company confirmed that it had received more US takeover interest – this time a $2.0 billion (€1.5 billion) offer from the New York-based online sports betting provider DraftKings.
Today, Ladbrokes owner Entain hit an all-time high after he told the market that it had received an average of 2800p a share from US fantasy sports retailer DraftKings on Sunday. Entain’s value is PS1.64 billion ($2.24 billion), a 46% premium to the undisturbed share price. Shares in Ladbrokes, which owns betting and betting agency Entain, rose 6% on Wednesday to a new all-time high of APS24 after the company announced a second takeover by US fantasy sports company DraftKings for APS28 per share.
A $20 billion offer to acquire UK online sports betting provider Entain for DraftKings shares and cash, sources said. The offer will cost 2,500 pence per share, and according to CNBC’s David Faber, the sports betting company’s shares will have a cash component. DraftKings offers Entain investors 630p in cash and the rest in shares.
It is worth noting that Entains’ share price is higher than when the recent takeover speculation began, with the company’s share price standing at PS19.4150 at the start of business on September 21. The second approach to takeover for US fantasy sports company DraftKings consisted of APS2.8 per share, consisting of APS630 in cash and the remainder in new Drafking shares at a share ratio determined at the price of the first agreed public announcement. Entains owner GVC has rebranded itself as GVC and is targeting a bid of PS25 per share or more, equivalent to PS1.46 billion.
Regarding the Entain share price forecast, the Financial Times asked 13 analysts about their Entain share price forecasts for 2021 and 2022. The results did not generate positive activity on the stock market, at least not at Entain, and the news on the share price was overwhelming. Of the 13 analysts, the highest Entain share price forecast was 4.4% above the closing price on 11 October at PS28.00, while the average Entain share forecast was PS22.00 (4%).
Entains shares jumped 21% after the announcement, trading at £2,170, compared with the offer price of £2.8 per share. When the market closed on October 11, Entains’ share price was PS21.08 and on October 12, when the exchange reopened, around PS20.70, a drop of just over 18%. The platform’s share price closed at 23p (1942.50p) on Thursday afternoon.
Shares in British betting company Entains soared 6% on the London Stock Exchange on Wednesday amid rumours of a possible deal that could more than double the price of its shares this year. In January, MGM Resorts International, Entains’ US-based partner, put its own planned acquisition of Entains on hold after harrowing the possible price. In January, Entains rejected an $11 billion (7.95 billion euros) stock offer from the British gambling group, saying the company was undervalued.
The portfolio of sports betting and gambling companies includes some of the UK’s best known brands, including Ladbrokes and Coral. If DraftKings succeeds in its bid for Entain, it would have access to physical betting shops operated by UK companies Coral and Ladbroke. Should Entain be taken over, however, the new owners are unlikely to have much interest in owning Ladbroks or Corals betting shops.
In July 2018, GVC, Ladbrokes and Coral agreed to a $200 million deal with MGM Resorts to benefit from the liberalised US sports betting market. Ladbroke owner Entain has more than quadrupled its profits thanks to high online bets on the packed sporting calendar, including Euro 2020. Its UK businesses also benefitted from hosting sporting events cancelled last year, such as the Aintree Grand National, and new products have been released for its 5-a-side betting game.
Shares in Ladbrokes owner Entain soared in late afternoon trading yesterday after it was revealed it had received a takeover request from US betting giant DraftKings. Entain PLC confirmed Tuesday that US fantasy sports betting company DraftKings made a bid that could be valued at $20 billion according to a media report. In March 2020, it emerged that it was the owner of the ancient betting chain Ladbrokes Coral.
Eyebrows were raised in January this year when gambling company Entain, owner of bookmaker Ladbrokes and coral bingo operators Gala and Foxy Bingo, rejected an $8 billion approach from US hotel and casino operator MGM Resorts International. It was a bold move on the day the offer was made after the company’s former chief executive, Shay Segev, stepped down to take a lucrative role with sports broadcaster DAZN. The gap between the current price and the offer price suggests that investors see a stumbling block.
Most of this has to do with the small cash portion of the DraftKings offer and the shares that DraftKings (and not Entains) shareholders are allowed to hold beyond their investment mandate. While Entain appears to be on solid ground with a near-perfect share price, Hargreaves Lansdown needs more evidence to convince.
