What happened
Actions of MGM Resorts International (NYSE: MGM) closed nearly 6% on Monday after a joint venture partner revealed that MGM is trying to acquire it.
And
MGM joint venture partner (JV) Entain (LSE: ENT) today revealed that MGM has made an acquisition offer of approximately $ 11 billion. MGM and Entain – formerly called GVC Holdings – are partners in the sports betting app BetMGM and online casino games. Entain said the offer, which represents a 22% premium over last week’s closing price, “significantly underestimates the company and its prospects.”
Image source: Getty Images.
What now
Entain confirmed that it has received several offers, so MGM seems determined to make the acquisition. The drop in today’s stock price indicates that MGM investors are betting that the company will again increase its offering for Entain, which also owns the British gaming brands Ladbrokes and Eurobet, among others. MGM offers come later Caesars Entertainment merged with Eldorado Resorts last year and announced plans to acquire UK-based oddsmaker William Hill in a business of almost $ 4 billion.
BetMGM was launched in 2018 and offers sports betting and online casino games using Entain technology and MGM casino brands. BetMGM announced its launch in Iowa today, marking the expansion into its eighth US state.
While MGM waits for a full recovery in its physical casinos, BetMGM is a company that helps drive growth. In addition to launching in states that have legalized sports, BetMGM added new partnerships with several professional sports teams. Long-term investors in MGM should consider today’s drop an opportunity, although they hope the casino operator will increase its offer to try to get a growing segment entirely under its corporate umbrella.