The DraftKings Sportsbook at The Brook in Seabrook, New Hampshire.
Scott Eisen/Getty Images for DraftKings
DraftKings has reportedly made a $20 billion cash and stock offer for U.K. betting giant Entain , in a potential deal that would bring consolidation to the increasingly competitive sports betting sector.
Entain (ticker: ENT.London) confirmed Tuesday that it had received a stock and cash proposal from DraftKings (DKNG), following a report from CNBC, but didn’t give specific details.
DraftKings stock fell on the news, slipping close to 7% in early trading. In contrast, shares of Entain, formerly known as GVC Holdings, surged more than 19% following reports of DraftKing’s bid.
The London-listed betting and gambling group rejected an $11 billion takeover bid from casino operator MGM Resorts International in January this year, saying it “significantly undervalued the company.” Entain and MGM’s 50-50 joint venture BetMGM has positioned itself as one of the industry’s leading players in recent years. Entain also owns a number of gambling brands, including Ladbrokes, Coral, Gala Bingo, and Party Poker.
The U.K.’s biggest betting companies have joined with their U.S. counterparts in recent years to capitalize on a sports betting boom as more states legalize the practice. DraftKings has become one of the market leaders, along with FanDuel, which is 95% owned by London-listed Flutter Entertainment. The two companies have used their fantasy sports success to grab market share in online sports betting.
While Entain resisted the advances of its American ally MGM earlier this year, William Hill accepted a $4 billion takeover bid from its partner Caesars Entertainment last year.
Read: Why Online Sports Gambling Companies May Never Earn Much Money
The race to buy William Hill turned into something of a bidding war, with private-equity group Apollo Global Management also making an offer. Caesars made it clear it could terminate its partnership with William Hill if the British company chose to accept a rival offer.
With that in mind, it’s unclear yet how a potential deal for DraftKings to buy Entain would impact the FTSE 100 company’s joint venture with MGM.
Under U.K. takeover rules, MGM was prohibited from making another bid for Entain for six months—but that deadline passed in July, sparking speculation it could reignite its interest.
Write to Callum Keown at [email protected]
