DraftKings courts British betting firm Entain with $22.4-billion offer

BRITISH gambling firm Entain said on Tuesday that US fantasy sports betting company DraftKings had made a takeover proposal that valued it at $22.4 billion.

Under its current proposal, DraftKings plans to offer GBP28 per Entain share, representing a premium of 46.2% to the UK firm’s Monday close. Entain said it had earlier rejected a proposal from DraftKings to buy the company for GBP25 ($34.15) per share.

Entain’s shares closed up 18% as the companies confirmed the approach, which would give the US firm access to the Ladbrokes Poker and bwin online betting brands. Shares of DraftKings were down 0.6% in extended trading after closing 7.4% lower at $52.77.

DraftKings’ takeover proposal comes after Entain had rejected an $11-billion offer from US-based MGM Resorts International in January, saying it undervalued the company, but analysts expect MGM to return with a new bid as it has since accumulated more cash.

Entain and MGM already have a joint venture called BetMGM, an online sportsbook for betting on National Football League (NFL) and National Basketball Association (NBA) games that controls about 21% of the market versus DraftKings’ 17%, according to RBC Capital Markets.

Any deal in which Entain would own a competing business in the United States would require MGM’s consent, MGM said on Tuesday in response to DraftKings’ approach.

The deal frenzy in the online gambling space comes at a time when regional operators are looking to expand and capture opportunities in states across the United States opening up to sports betting. — Reuters