MGM is looking to buy the owner of Ladbrokes

The exact details and value of the new offer could not be found, but it is over £ 12.85 – or $ 17.56 at the current exchange rate – a share that MGM had offered at the end of last year, people said. There is no guarantee that Entain will be receptive to the new offer or that there will be a deal.

A combination could create one of the few large gaming companies in the world with a significant online and brick presence. Other recent industry consolidations would follow.

Like his colleagues, MGM was under pressure as the coronavirus pandemic kept its biggest money factors – casinos and hotels on the Las Vegas Strip – closed or operating at a sudden reduced capacity for much of the year. .

Meanwhile, the online gaming market was already booming before the pandemic gave it an extra boost. This has led casino operators such as MGM to pivot their business even faster than planned, often through partnerships and acquisitions.

MGM currently earns a small share of its revenue from online betting, which casinos have long seen as a threat, but increasingly see as an opportunity as people socially distance themselves from home and the pandemic keeps players away from it. slots and blackjack tables. The trend towards online gambling is not expected to reverse any time soon.

Entain, known until recently as GVC Holdings, is one of the largest gaming companies in the UK after concluding a deal of about $ 5 billion that put Ladbrokes under its roof in 2018. Its shares have grown recently, as the pandemic brought the central scene of online gaming. Las Vegas-based MGM has a market value of about $ 16 billion and is best known for its casino properties, which include Bellagio and Mirage.

Barry Diller’s IAC internet conglomerate became MGM’s largest shareholder in August, revealing a share of about 12%, then valued at about $ 1 billion. At the time, he said he plans to work with the company to expand its online gambling business. Mr. Diller, IAC President and CEO Joey Levin also joined MGM’s board of directors.

Another top shareholder, Corvex Management LP, also holds a seat on the board of hedge fund activist founder Keith Meister.

Caesars Entertainment Inc.

CZR 0.79%

recently struck a deal worth about $ 4 billion to buy William Hill WMH in the UK 0.30%

PLC, which already has a joint venture with rival MGM. Caesars shareholders hailed the deal, ending its year with about 25%. The transaction is due to end in March.

Meanwhile, investors have piled on companies with the potential to be major players in the growing online gaming market, especially in the US stock prices of DraftKings Inc.

DKNG -4.88%

and Penn National Gaming Inc.,

PENN -0.83%

for example, they increased by almost 340% and 240% in 2020, respectively.

DraftKings went public in April through a transaction with an uncompleted verification company and a merger with a small gaming technology provider simultaneously. Penn National, in early 2020, took a significant stake in Barstool Sports Inc., which was closely owned, in a deal that gave it exclusive rights to use the media company’s brand in its sports betting products.

MGM shares ended the year down about 5%, while Entain closed at around 30%, possibly by approving its potential as a takeover target.

MGM and Entain’s management teams have existing links. Since 2018, they have become exclusive partners on BetMGM, a small but growing online gaming company, both of which have recently been funded. BetMGM, which uses Entain technology and MGM licenses and trademarks, operates in more than 10 states, including Nevada, New Jersey and Indiana. His plans will be in over 20 by the end of this year.

Write to Cara Lombardo la [email protected]