MGM Resorts won’t pursue a bid for the whole of Entain according to reports stating that the casino player is ‘not interested’ in the purchase.
According to The Times, the decision comes amidst a period of increasing pressure on Entain shareholders after the firm endured a challenging trajectory in online growth. Entain also agreed a £585m settlement with HMRC over an investigation into a legacy case involving bribery in Turkey.
Meanwhile, the London-headquartered company’s joint venture in the US, BetMGM, is more likely to be eyed up by MGM Resorts in the event of any potential sale.
The BetMGM brand is anticipated to have a positive 2023, in spite of an increasingly competitive landscape in the US, whilst it may be the subject of a potential Entain deal that MGM Resorts is most keen on. The competition for market share in the US could present an obstacle to the appetite of an agreement going ahead.
In 2021 a bid had come in from MGM Resorts of around $11bn (£8.1bn), however at the time the group stated that the bid “significantly undervalues the company and its prospects.”
Since then, Entain has completed a myriad of acquisitions, including STS, Poland’s largest bookmaker. The €750m buyout saw Entain raise €600m in shares was the moment hedge fund investor Ricky Sandler of Eminence Capital decided to go public with his discontent.
As well as this, the group also acquired BetCity in the Netherlands for €550m and SuperSport in Croatia for €690m.
That being said, even withstanding an abundance of bolt-on acquisitions, the overall value of Entain is likely to have shrunk, with a valuation of $11bn unlikely to be met now following judgement from Goldman Sachs – the bank’s analyst, Ben Andrews, removed the “buy” recommendation on the stock and hit the “sell” button.
SBC News reported that the M&A teams are feeling like they are bearing the brunt of the company’s shortcomings, leading to rumblings of discontent within the company.