US sports betting giant DraftKings has officially called it a day on its multi-billion dollar bid to buy Entain.
The deal would have involved cash and stocks and would have resulted in areas of the Entain business potentially needing to be reshuffled.
No firm offer will be made
Last month, DraftKings proposed a takeover on two separate occasions.
At the time, Entain’s board said: “The company has a strong track record of growth and runway for further significant growth as set out in the capital markets day on 12th August, with the potential for its total addressable market to grow by more than three times to $160 billion.
“Entain has the most diversified and regulated revenues of any of the global operators and leads the industry in player protection through its Advanced Responsibility and Care (ARC) programme.”
DraftKings interest in Entain was significant, with the operator ready to bid over $22 billion for the group. The company was recently given an extension until 16th November to make a decision on whether it would make a formal bid, having missed the 19th October deadline, but has now decided against it.
CEO Jason Robbins said: “After several discussions with Entain leadership, DraftKings has decided that it will not make a firm offer for Entain at this time.
“Based on our vertically-integrated technology stack, best-in-class product and technology capabilities and leading brand, we are highly confident in our ability to maintain a leadership position and achieve our long-term growth plans in the rapidly growing North America market.”
What has Entain said about DraftKings’ decision?
After the takeover talks collapsed, Entain remained positive about the future. The company explained: “Entain has an outstanding track record of growth, having delivered 23 consecutive quarters of double-digit online net gaming revenue (NGR) growth, representing a three-year compound annual growth rate (CAGR) of 19% across 2021.
“As a result, the board is confident in Entain’s ability to continue to deliver material value for its shareholders going forward.”
DraftKings deal would have required reshuffling in assets
DraftKings is currently one of the largest betting operators in the US. In the digital gaming space, one of its biggest competitors is BetMGM.
Entain and MGM Resorts currently operate the BetMGM joint venture in the US. If DraftKings’ takeover was successful, MGM would have demanded full control of this particular asset.
MGM Resorts International CEO Bill Hornbuckle said that BetMGM would have needed to become more of MGM Resorts’ control if a deal had gone through, and spoke about the potential deal at the Global Gaming Expo: “We have 50% now. I would like more. I would need more.
“There’s a lot of ways to structure it. The only thing that would be successful for us is if we got control of it and had a technology that we could proceed with.”