MGM Resorts International has decided against submitting a revised offer to acquire Ladbrokes and Coral operator Entain.
The US casino operator submitted a proposal to acquire Entain, formerly known as GVC Holdings, in early January, offering 0.6 shares for each Entain share, and valuing the operator at approximately $11bn, which would’ve seen its shareholders retain 42% of the combined company.
However, Entain dismissed the proposal shortly afterwards, saying it believed the offer “significantly undervalues the company and its prospects.”
MGM Resorts’ largest shareholder InterActive Corp (IAC) gave its backing to the proposal, saying it would be willing to provide $1bn in the casino operator’s bid to purchase Entain.
In the interim, Entain CEO Shay Segev announced he will be leaving to take a co-CEO role at DAZN, although he suggested the MGM Resorts offer had nothing to do with the decision.
Yet, despite being given until 1 February to announce its firm intention to put forward an offer, MGM Resorts has now said it does not intent to submit a revised proposal, after the initial all-stock proposal was rejected, citing limited recent engagement between the two companies.
MGM Resorts CEO Bill Hornbuckle said: “BetMGM, our US sports betting and online gaming venture with Entain, remains a key priority for the company as we continue to leverage our preeminent physical gaming, entertainment, and hospitality platform to expand digitally.
“We believe BetMGM has established itself as a top three leader in its markets and we remain committed to working with Entain to ensure its strong momentum continues as it expects to be operational in 20 states by the end of 2021."
Despite the news, it might not be the last we hear about a potential merger. Gaming industry analyst and SpringOwl Asset Management CEO Jason Ader told Gambling Insider earlier this month he expects MGM Resorts to “sweeten its price” and that he sees the two “coming together.”
Since the news broke, Entain's share price fell sharply to £12.24 ($16.66), from £14.06; it has since risen slightly to £12.38.