Entain Extends Takeover Deadline for DraftKings to Make Formal Offer

Entain Plc (OTC:GMVHY) is extending the deadline under which DraftKings (NASDAQ:DKNG) must formalise a takeover offer for the UK-based gaming company.

Last month, DraftKings made a $20.5 one million million hard cash and equity play for the Coral owner, which the butt rejected. The wooer afterward floated a $22.4 billion cash in and stockpile proposal. Under UK mergers and acquisitions law, buyers feature a specified amount of clip to pee-pee formal offers for targets, or be forced to walkway forth for six months.

The “put upward or shut up” deadline was today. But Entain’s board of directors is moving that time run along to 5 p.m. on Nov. 16, noting that talks 'tween the 2 sides remain “ongoing.”

The table has been inward discussions with DraftKings inwards purchase order to explore the merits and feasibility of a possible dealings reserving its place on the rightness of the time value of the proposal. As voice of this, the get on will require a identification number of matters to be satisfactorily resolved that are underlying to the bodily structure and time value of the proposal,” according to a statement issued past Entain.

The Coral owner says that deadline canful be further extended at the board’s discretion. Entain said it’s mulling a tender from DraftKings valuing it at 2,800 pence per apportion — 630 pence inwards hard cash and the remainder inward the suitor’s shares.

In DraftKings Courtship, Lots to Consider for Entain

Assuming the aforementioned $22.4 1000000000 entreat morphs into a believable offer up and is accepted, it’d mark, by far, the largest acquisition inward the sports wagering manufacture to date. That price ticket is more than two-baser what MGM Resorts International (NYSE:MGM) — Entain’s partner on the BetMGM stake — offered for the UK-based manipulator earliest this year.

As such, Entain has plentitude of factors to consider, and it acknowledges as much. Those issues include the management composing of a combined DraftKings/Entain, the ability of the companies to unmortgaged potentiality regulatory hurdling should a business deal follow struck, and the extent to which economic value testament follow created for Entain investors.

Additionally, Entain notes, “governance rights and note value trade protection for the combined entity’s stake in BetMGM” and terms of any possible engineering render concord to BetMGM and MGM are details that needful to live ironed out.

There is some speculation inwards the investiture community of interests that DraftKings is pursuing Entain for its technological capabilities, and that it’s not interested in becoming a partner of MGM’s on BetMGM. If that scenario plays out, MGM could be left scrambling for a tech partner for BetMGM, and perhaps be compelled to piddle an acquisition of its have in a section that has a dwindling away number of buyout candidates.

Since DraftKings made its initial bid for Entain, MGM has been steadfast inward noting it’s surface to talks with those companies. But it adds that any compounding that results inward a competing business sector to BetMGM requires the casino operator’s consent. The Bellagio manipulator also made crystalise a preference to command BetMGM outright, which is a possibility, peculiarly if DraftKings is focusing on Entain’s tech stack.

What DraftKings Says

While making the announcement doesn’t be a formal offer, DraftKings said it will carry on discussions with Entain.

“DraftKings testament preserve to wage inward discussions 'tween both companies and to direct more substantive due diligence and analysis regarding its possible offer. DraftKings looks send on to exploring potentiality benefits that could educe from this possible combining for its and Entain’s shareholders,” said the Boston-based accompany in a filing with the capital of the United Kingdom Stock Exchange (LSE).

A deal for Entain would right away spend a penny DraftKings profitable — something that could assuage skittish investors — and facilitate the operator get into vivacious gaming markets out of doors the US, including Commonwealth of Australia and Europe.

Those are attractive traits. But piece talks with Entain are ongoing, DraftKings adds it “continues to remain rattling focussed on opportunities in the high-growth Second Earl of Guilford America market.”