MGM Resorts International and Ladbrokes and Neds owner Entain have a productive partnership and their BetMGM brand is one of the biggest betting and gaming operators in the US.
However, MGM wants to have full control of BetMGM, as well as all other Entain assets and has already made two bids in the past. First, a A$14.5 billion bid that Entain dismissed right away and a A$16 billion offer that the Ladbrokes and Neds owner rejected in January 2021.
Only a Large Offer Will Convince Entain to Sell
Experts say that MGM will soon come back with a new and improved offer for the other 50% in the 50/50 BetMGM partnership and the entire British bookmaker as well.
According to Citi analyst Monique Pollard, Entain’s falling price and the strength of the US dollar are reasons why MGM feels confident that a new bid for the Ladbrokes owner could now be successful.
Entain’s share price has not been doing very well this year, but Pollard still feels that MGM will need to make a sizeable offer if Entain is to accept it. The Citi analyst thinks that the Bellagio operator will have to pay at least 50% above Entain’s current share price.
MGM is the Only Entain Buyer that Makes Sense
But MGM Resorts is not the only wagering giant looking to buy Entain. DraftKings sent shockwaves through the world of betting when it made two offers of A$29 billion and A$32 billion. Both were in cash and equity and both were rejected.
Entain CEO Jette Nygaard-Andersen said that the company’s existing partnership with MGM was one of the reasons why the DraftKings bids failed. So, even though Entain is one of the most desirable betting businesses in the world, MGM is probably the only buyer that will have a bid accepted.
After all, the 50/50 ownership of BetMGM means that MGM will have a say in any bid made for Entain, and that’s particularly important when a competing betting operator like DraftKings wants to merge its business with Entain’s.
Another reason why MGM Resorts International is the only Entain buyer that makes sense is the economic benefit it will get when it no longer has to share BetMGM’s profits with the London-listed company.
Lastly, buying Entain would allow MGM to be less reliant on offline gaming and betting, particularly land-based casinos. Entain operates some of the largest sportsbooks in the UK, Australia, and Canada and BetMGM is one of the three best-performing betting operators in the US.
So, if MGM manages to strike a deal with Entain, it will also be able to move the BetMGM brand to new markets while continuing to operate all existing Entain brands.