Bill Hornbuckle insists no Entain takeover ‘for now’ as MGM takes its own route

Laying out its plans for 2023 in its most recent earnings call, the leadership of MGM Resorts has made it clear that a potential acquisition of European partner Entain is not on the table. 

The company has been involved in a long-running joint venture with FTSE100 gambling group Entain since 2018, operating the US-facing BetMGM brand.

However, an escalation of this relationship to a potential merger or takeover has been mulled over in recent years, both in 2021 and 2022 – but MGM CEO Bill Hornbuckle now asserts that this is no longer the case.

“I think it’s time to be definitive and give a little direction,” Hornbuckle remarked. “The simple answer on Entain is no, we’ve moved on. While we remain highly focused on BetMGM business through our partnership with Entain, and making sure that our business continues to grow. 

Hornbuckle states that MGM’s M&A focus will shift towards executing smaller bolt-on M&As to advance the development of the group’s digital platform, which began following its acquisition of Leo Vegas AB for $607m. 

“We see great potential in LeoVegas’ expansion capabilities. I said before we liked their technology platform and their leadership team,” he explained.

MGM is going to follow its ‘own direction’, according to the firm’s CEO, and allocate capital appropriately, although he did note that ‘for now, the answer is no, not with Entain’ – suggesting that an offer could be revisited in the future.

An initial MGM bid of £81.bn in 2021 saw Entain reject the offer – stating that it significantly undervalued the company – and it was later withdrawn by the US suitor. 

MGM outlined earlier this year that it would re-evaluate a potential buyout of its European counterpart dependent on the outcome of the UK’s Gambling Act review, which has been delayed once again following a change in DCMS leadership.

Meanwhile, having topped its 2023 earnings guidance, leadership of Entain maintains that it is ready for all outcomes related to MGM’s long-speculated interest.  

The FTSE100 group maintains its ‘headline target’ that the BetMGM JV will become an EBITDA Positive venture by end of year trading. Alongside MGM, a further $150m has been committed to accelerate the venture and its market % share across US states.

In Europe, Entain outlined that its priorities are focused on upcoming UK regulatory/compliance adjustments, stabilising the performance of its European retail unit and advancing its % share across underpenetrated CEE markets. 

Despite MGM twice withdrawing its interest in acquiring Entain, and Hornbuckle’s recent assertions, city analysts cited by the Daily Mail’s This is Money finance page last month insist that a merger is ‘inevitable’ further down the line.