MGM Resorts International is reportedly preparing a new takeover bid for Ladbrokes and Neds owner Entain Plc. MGM (NYSE:MGM) and Entain (OTC:GMVHY) are 50/50 partners in BetMGM, but the American gambling giant has long maintained that it wants full ownership of the venture.
According to an anonymous source close to MGM that the Offshore Gaming Association (OSGA) cited, the operator considered partnering with Entain a big mistake. The source also said that MGM was now ready to do “whatever it takes” to acquire Entain and get full ownership of all its assets or buy its 50% share in BetMGM.
MGM Higher-Ups Fancy Entain’s Australian and European Assets
If MGM goes for the first option, it will also acquire Entain’s Australian and European betting operators. And there are question marks whether the American gambling behemoth is ready for such a move.
However, according to the MGM source, there are people in the company that feel that online wagering “would grow exponentially” in Australia, Europe, South America, and Asia, and they want to ride that wave.
They reportedly thought that having brand names like Ladbrokes, Neds, Bwin, and SportingBet was a much better business strategy, as those bookies were more widely recognized than the BetMGM brand.
Another reason why acquiring Entain and its assets made more sense was that local staff had more knowledge of the market and how new players can be attracted.
MGM’s acquisition of LeoVegas, a wagering operator popular in Europe, is also an indication that MGM may be leaning towards acquiring already established bookmakers rather than entering markets as a new betting operator with its BetMGM brand.
Acquiring Entain Will Be Tricky
So, MGM acquiring Entain definitely makes sense. However, making that happen will be easier said than done. One reason for that is that Entain thinks of itself as more of a buyer than a seller and has acquired its fair share of betting industry rivals in recent years.
Another is that it has already rejected a A$16.9 billion MGM offer (US$11 billion) in January 2021. If the London-listed group wasn’t prepared to sell then, why would it accept an MGM bid now?
Entain Not Ready to Sell BetMGM Share Too
MGM might try to entice Entain to just sell its 50% share in BetMGM instead of going for a takeover of all its assets. That might also turn out to be wishful thinking.
BetMGM now generates revenue that’s five times higher than what was expected when the deal was made. Letting go of such a valuable asset in the current macroeconomic environment would be a risk for Entain, to say the least.
Whatever happens next, one thing is for sure, MGM won’t give up trying to get full ownership of BetMGM. How and when it will make its next move, remains to be seen, though.