Entain confirms reports of $20 billion offer from US giant DraftKings

Shares in Entain, the owner of Ladbrokes and Coral, surged on Tuesday following reports that major US gambling operator DraftKings was set to make a $20 billion (approx £14.65bn) bid for the company. Entain subsequently confirmed it had received contact from DraftKings, although no sum was mentioned.

MGM Resorts International, Entain's partner in US joint venture BetMGM, also said that any deal would need its consent.

Following the report by business news channel CNBC, Entain said in a statement: "The board of Entain confirms that it has received a proposal from DraftKings to acquire Entain, the consideration for which would include a combination of DraftKings stock and cash.

"There can be no certainty that any offer will be made for the company, nor as to the terms on which any such offer may be made."

Entain added further announcements would be made "as and when appropriate" and advised shareholders to take no action at this time. Shares in Entain spiked following the reports, ending the day 18 per cent higher at 2,261p. Under City rules DraftKings has until 5pm on October 19 to announce whether it intends to make an offer.

Entain's share price had already been on an upwards trajectory for a number of months due to speculation that MGM was preparing a bid. Entain rejected an offer of $11 billion from the US casino giant earlier this year.

BetMGM has established itself as the number two operator in the US's fast-growing sports betting and iGaming market, in which DraftKings and FanDuel – the latter a stablemate of Paddy Power and Sky Bet under the Flutter Entertainment banner – are among its main rivals.

Ladbrokes: among the firms owned by Entain

MGM said in a statement that any deal through which "Entain or its affiliates would own a competing business in the US would require MGM's consent".

The statement added: "MGM's priority is to ensure that BetMGM continues to capture the growing US online opportunity and realising MGM's vision of becoming a premier global gaming entertainment company. MGM believes that having control of the BetMGM joint venture is an important step towards achieving its strategic objectives.

"MGM will engage with Entain and DraftKings, as appropriate, to find a solution to the exclusivity arrangements which meet all parties' objectives."

US gambling companies have been targeting European operators in recent months, with Caesars Entertainment completing a £2.9bn takeover of William Hill in April.

Caesars retained William Hill's US business and earlier this month it was announced that 888 Holdings had agreed a deal to buy Hills' non-US assets for £2.2bn.

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