“It simply came to our notice then [MGM] to provide additional information on the strategic rationale for a combination of the two companies, “Entain said. The British company received several proposals from MGM, its statement suggested. MGM representatives did not immediately respond to a request for comment. .
Shares in Entain rose more than 26% on Monday, surpassing the price per share offered by MGM, a sign that some investors are waiting for another offer from the American company or another bidder. MGM is a major player in Las Vegas, operating casinos, including Bellagio and Mandalay Bay.
Companies have an existing relationship. MGM and Entain are co-owners of BetMGM, a sports betting and online gaming company that operates in more than a dozen US states. Entain, which owns brands such as Eurobet, Ladbrokes and Sportingbet, operates both retail and online companies.
Nicholas Hyett, a stock analyst at Hargreaves Lansdown, said he “can understand why MGM wants to take control” of Entain, given that the two companies are already working together on sports betting in the United States. But he warned that a higher price “could prove too high for MGM shareholders to swallow”.
MGM shares fell 0.3% in premarket trade on Monday.
The sports betting boom
The online sports betting industry has already grown in the United States following a 2018 U.S. Supreme Court ruling that clarified the path to its legalization in countries outside of Nevada. The American Gaming Association expects nearly 35 million people, or 13% of American adults, to bet on the NFL 2020 season.
The pandemic only accelerated the trend, causing a burst of trading and consolidation.