Entain Faces Potential Takeover Offer from MGM Amid Shrinking Market Cap

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Entain Plc, a prominent player in the gaming market, has seen a significant erosion in its market capitalization, following a lukewarm forecast for its net gaming revenue (NGR) in 2023 released this Monday. Consequently, it might well be on the receiving end of a takeover offer from MGM Resorts International once again.

Entain’s shares saw recovery on Tuesday after a notable drop on Monday. Nevertheless, its market capitalization settled at the close of US markets at $7.16 billion, a little over half of MGM’s impressive $12.93 billion value.

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Monday’s tumble practically wiped out all the gains Entain had made during the COVID-19 pandemic, implying that should MGM put another offer on the table, Entain and its shareholders might be more responsive this time around. While all of this is speculation at present, if true it could result in a significant shift in the gaming industry.

MGM previously extended an offer of $11.06 billion for Entain in January 2021. However, the offer was rejected as it fell short of expectations. Speculation was rife about MGM raising its bid, but such rumors were ultimately debunked. Given Entain’s current market standing, a potential takeover by MGM could witness the company offering a significant premium, while still spending less than their initial bid.

When it comes to the state of affairs between MGM and Entain, they can be succinctly summarized. The two companies equally share the stakes in BetMGM, one of the largest online sportsbook and iGamng operators in the US, projecting profitability in the second half of 2023.

MGM has publicly stated interest in controlling the entirety of this venture, and with Entain’s current woes in the UK market and slower growth in regions such as Australia and Italy, it might just have the opening it needs. This scenario could potentially serve as an opportunity for MGM CEO, Bill Hornbuckle, to increase control over the profitable U.S. sports-betting operations.

It should be noted that this speculation isn’t a recent phenomenon. Over the years, there have been discussions around MGM considering purchasing Entain’s stake in BetMGM. However, this has remained in the realm of speculation, and it is unclear whether Entain would even agree to such a proposition.

In the investment world, there’s a feeling of vulnerability surrounding Entain. It seems potential missteps could possibly prompt an unsolicited takeover offer not just from MGM, but other suitors as well. Ricky Sandler, the CEO and CIO of Eminence Capital, a significant investor in Entain, expressed these concerns back in June well before Entain’s revenue forecast was out.

In hindsight, many shareholders may regret not having encouraged Entain to accept the takeover in 2021. That year, both MGM and DraftKings proposed lucrative bids for the company, with the latter even supposedly floating a $22 billion figure, a digit that dwarfs Entain’s current market value.

Speaking of online gambling and betting, can we take a moment to address the ever-evolving world of online casinos? Canadians love online casinos, especially those that understand and cater to their specific needs. As part of West Island blog’s commitment to ensuring our readers are always in-the-know, we’ve taken the time to curate a list of the leading online casinos for you, which we update monthly. Feel free to check out our selection; playing responsibly has never been easier.

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Melinda Cochrane is a poet, teacher and fiction author. She is also the editor and publisher of The Inspired Heart, a collection of international writers. Melinda also runs a publishing company, Melinda Cochrane International books for aspiring writers, based out Montreal, Quebec. Her publication credits include: The art of poetic inquiry, (Backalong Books), a novella, Desperate Freedom, (Brian Wrixon Books Canada), and 2 collections of poetry; The Man Who Stole Father’s Boat, (Backalong Books), and She’s an Island Poet, Desperate Freedom was on the bestseller's list for one week, and The Man Who Stole Father’s Boat is one of hope and encouragement for all those living in the social welfare system. She’s been published in online magazines such as, (regular writer for) ‘Life as a Human’, and Shannon Grissom’s magazine.