DraftKings says that it is looking forward to further exploring potential benefits of a $20bn takeover of Entain, after a deadline to make a definitive agreement on such a move was extended.
The gambling group confirmed that its ‘Put Up or Shut Up’ deadline must now be made by no later than 5pm on November 16, 2021, when Draftkings must either announce a firm intention to make an offer or that it does not. This deadline may be further extended with the consent of the panel on takeovers and mergers, at Entain’s request.
“DraftKings will continue to engage in discussions between both companies and to conduct more substantive due diligence and analysis regarding its possible offer.
“DraftKings looks forward to exploring potential benefits that could derive from this possible combination for its and Entain’s shareholders, including expansion into regulated and regulating markets, accelerated product growth, and innovation in new and existing verticals”.
However, that firm does note that while discussions surrounding the takeover proposal are progressing, it remains “very focused” on opportunities in the high growth North America market.
Matters which Entain has described as ‘fundamental’ to the value of the proposal include total value creation for Entain shareholders, including synergy shares; governance and management composition of the prospective combined entity; and deliverability of such a transaction, including antitrust and regulatory clearances.
Furthermore, the status of BetMGM, which Entain operates as a US-facing subsidiary in collaboration with MGM Resorts, has also been cited as an issue requiring further clarification.
Entain added that governance rights and value protection for the combined entity’s stake in the brand need greater assurances, in addition to the terms of any proposed technology support agreement to both BetMGM and MGM.
However, talks of a potential buyout of BetMGM was hinted at by MGM Resorts’ CEO Bill Hornbuckle earlier this month, following DraftKings initial proposal to Entain.
Irrespective of DraftKings approach, Entain governance remains focused on executing its corporate strategy presented to investors on August 12 that aims to treble the businesses addressable market size to $16bn.
Its update read: “The board strongly believes in the future prospects of Entain, underpinned by its leading market positions, world class management team and industry-leading proprietary technology.
“Entain has an outstanding track record of growth having delivered 23 consecutive quarters of double digit online NGR growth, and a three year CAGR of 19 per cent across 2021.”