MGM said it would not make a firm offer to buy UK gambling company Entain, two weeks after its proposed £ 8 billion takeover bid was rejected by the target’s board.
“After careful consideration and reflection on the recent limited involvement between the respective companies in relation to all MGM rejected stock proposals. . .[MGM]does not intend to submit a revised proposal, ”said the company on Tuesday.
The share price of Entain, which owns the Ladbrokes and Coral networks in the UK, fell sharply with the news and fell 16% on the London lunchtime trading day.
MGM’s initial proposal, which followed several openings in November, was rejected by Entain’s board, which argued that it “significantly underestimated” the business.
The news also follows the shocking departure of Entain’s chief executive last week.
The two companies run a 50/50 joint venture in the United States to explore the growing market for sports betting and online games, which analysts estimate could reach annual revenues of $ 20 billion or more by 2025.
Barry Diller, whose holding IAC is the largest shareholder in MGM, told the Financial Times in an interview this month that he was “skeptical” that the deal could be closed, but that MGM would be in a “any leading position” in the game online market.
MGM said in Tuesday’s statement that it is still “committed to being a top-tier omnichannel global gaming and entertainment company and will maintain a disciplined structure while assessing a number of attractive strategic opportunities”