DraftKings makes bid to acquire Entain

London-listed betting and gaming operator Entain has confirmed that it has received a proposal from DraftKings to acquire the business.

In response to recent media speculation that DraftKings had made an offer of more than $20bn for its business, Entain’s board said only that the consideration would include a combination of DraftKings stock and cash.

“There can be no certainty that any offer will be made for the company, nor as to the terms on which any such offer may be made,” said Entain’s board. “A further announcement will be made as and when appropriate. Shareholders are urged to take no action at this time.”

Under the City Code on Takeovers and Mergers rules, DraftKings must announce a firm intention to make an offer for Entain, or announce that it does not intend to make an offer, by 5pm on 19 October.

MGM Resorts, which owns the BetMGM US joint venture with Entain, said it was aware of DraftKings' possible offer for Entain.

“MGM is Entain's exclusive partner in the US online sports betting and iGaming market through our highly successful 50/50 joint venture BetMGM,” said MGM Resorts in a statement Tuesday. “As a consequence, any transaction whereby Entain or its affiliates would own a competing business in the US would require MGM's consent.

“MGM's priority is to ensure that BetMGM continues to capture the growing US online opportunity and realizing MGM's vision of becoming a premier global gaming entertainment company. MGM believes that having control of the BetMGM joint venture is an important step towards achieving its strategic objectives.

“MGM will engage with Entain and DraftKings, as appropriate, to find a solution to the exclusivity arrangements which meets all parties' objectives.”

Shares in Entain plc (LSE:ENT) soared by 18.04 per cent to 2,261.00 pence per share in London Tuesday following the announcement. Shares in Draftkings Inc (NYSE:DKNG) were trading 4.25 per cent lower at $54.62 in New York, while shares in MGM Resorts International (NYSE:MGM) were up marginally by 0.53 per cent at $41.50.