The stocks of the US casino operator MGM Resorts are currently not doing so well. This is currently trading at £ 23 per share, around £ 5 less per share than last March. The effects of the ongoing COVID-19 pandemic are the reason.
Last year, MGM Resorts put an offer to buy the British gaming operator Entain plc (originally GVC) on the table, but Entain rejected it.
Lots of changes at Entain
Entain went through quite a few changes in 2020: Shay Segev was appointed as the new CEO of the British company in July 2020. Only a few months under Segev’s leadership a total of four sports betting licenses could be secured for the German market. The regulatory authority issued licenses for the GVC brands bwin, Sportingbet, Ladbrokes and Gamebookers. To do justice to the efforts of global leaders in the entertainment industry with sports betting and gaming also to the outside world, GVC announced its renaming to Entain plc.
Now MGM Resorts Entain is offering a whopping $ 11.1 billion. According to a press report from Entain, the casino operator offers 0.6 of its shares for every Entain share. This corresponds to a price premium of around 22% based on the current price or a price of around 1.383 pence per Entain share. In addition, an unknown cash payment is under discussion. If Entain accepted the offer, the group would still have a 41.5% stake in the merged company.
One consequence of a merger would be that the Entain brands would ultimately make MGM Resorts one of the world’s most recognized online gaming operators. Both groups, MGM Resorts and Entain, are already very active in the US sports betting market. A merger could well be a strategic step, especially since the companies already jointly run a joint venture BetMGM.