It’s fair to say that 2021 has already been a high octane year for investors in Entain.
The gambling firm, which boasts PartyCasino, PartyPoker, the Gala brands and sports betting operators like Ladbrokes and Coral, has been subject to a whopping $8.1 million takeover bid from US casino giant MGM Resorts.
Early reports suggest that the offer has been rejected, although rumours persist that Entain officials may be open to further negotiation – more on that shortly.
However, the firm – formerly known as GVC Holdings – are not resting on their laurels, and are thought to be eyeing an audacious takeover bid of their own.
Entain has offered around £252 million for Enlabs, a gambling operator that largely targets the Eastern European market through brands like Ninja Casino, Best Casino, Livematchen and Optibet.
The bid is a sure sign that Entain are going to kick on with growth and expansion plans of their own, and it has been reported that their offer has been accepted by an independent bid committee, although full approval from shareholders will be needed by February 18.
It is expected that shareholders will be only too willing to get Entain’s financial muscle on board at what is a turbulent time for Enlabs. One of their brands, Global Gaming (the former proprietor of Ninja Casino), had their Swedish licence revoked back in October, and so the steadying hand of Entain’s investment could not be better timed, you suspect.
It would give Entain exposure to new markets across the Balkan region, where Enlabs is amongst the market leaders in Latvia, Estonia and Lithuania, with further expansion into Ukraine and Belarus likely.
MGM Could Yet Seduce Entain Shareholders
Often in the cutthroat world of business takeover bids are ‘hostile’, designed to eliminate a rival out of competition.
That’s not necessarily the case with MGM’s offer for Entain, as the two firms already have a constructive working relationship. They joined forces in 2018 to create Roar Digital, and both contributed more than $200 million to get BetMGM off the ground.
It’s a smart move by MGM, as not only would the takeover enhance their position in the online gambling arena in their native USA, but also offer an angle in to other key jurisdictions, such as the UK and Europe, as well.
The acquisition could also be described as a protective move as well. Caesars Entertainment is set to buy out William Hill, with the deal formally approved in 2021, while earlier last year The Stars Group and UK gambling giants Betfair and Paddy Power joined forces to become Flutter Entertainment.
Despite a predictable hit spring 2020, Entain’s share price has since recovered and so they have the arsenal to fend off MGM….until, that is, they make an improved offer – that seems highly likely as the casino conglomerate looks to consolidate its online offering ahead of a potential boom in regulated gambling in the United States.
Entain shareholders want to hear more about what MGM might have planned for their brand should any takeover be approved, and so really it’s a case of watching this space as to how things will develop. What is for sure, this story has plenty of legs yet….