SBC News DraftKings remains confident in potential buyout after Entain extension

DraftKings remains confident in potential buyout after Entain extension

DraftKings has maintained confidence in a potential £20 billion buyout of Entain, after the latter extended its ‘Put Up or Shut Up’ deadline yesterday, requesting clarification on a number of issues relating to the transaction.

The FTSE100 gambling group has pushed the deadline forward to 16 November 2021, requiring the US sports betting and fantasy sports operator to make a firm intention to purchase Entain ‘by no later than 5pm’.

However, although DraftKings maintains interest in and continues to engage in discussions surrounding a potential acquisition of the international retail and online operator, it will remain ‘very focused’ on opportunities in the North American market.

“DraftKings will continue to engage in discussions between both companies and to conduct more substantive due diligence and analysis regarding its possible offer,” DraftKings detailed.

“DraftKings looks forward to exploring potential benefits that could derive from this possible combination for its and Entain’s shareholders, including expansion into regulated and regulating markets, accelerated product growth, and innovation in new and existing verticals”.

Additionally, the new deadline of 16 November could be further extended at Entain’s request, with the consent of the panel of takeovers and mergers, whilst also requiring clarification on the status of its US-facing subsidiary BetMGM, operated in cooperation with MGM Resorts.

Entain cited the governance rights and value protection for the combined entity’s stake in BetMGM as needing greater assurances, in addition to the terms of any proposed technology support agreement to both BetMGM and MGM.

The status of BetMGM has also been raised by MGM CEO Bill Hornbuckle, who hinted at the possibility of fully acquiring the online sports wagering unit should Entain be purchased by DraftKings, citing terms of the duo’s agreement which state that a potential new owner of? Entain would not be able to operate BetMGM without the permission of its stateside partner.

In updating the deadline, Entain further detailed that pursuing market growth in North America via BetMGM remains a commercial objective, as one of the opportunities laid out at its capital markets event on 12 August – which saw the firm aim to treble its addressable market size to $160 billion.

Additional issues which have been described as ‘fundamental’ to the structure and value of the proposed acquisition include total value creation for Entain shareholders, factoring in synergy shares; governance and management composition of the prospective combined entity; and deliverability of such a transaction, such as anti-trust and regulatory clearances.

SBC News DraftKings remains confident in potential buyout after Entain extension

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