Entain, the igaming giant formerly known as GVC Holdings, has confirmed that its US joint venture partner MGM Resorts International has put forward a proposal to potentially acquire the business.
MGM Resorts’ most recent proposal would offer 0.6 MGM shares for each Entain share, which based on closing prices on 31 December 2020, represents a value of 1,383 pence per Entain share. This in turn represents a 22% premium on Entain’s share price.
Should the proposal be firmed up with a concrete offer, it would see Entain shareholders own approximately 41.5% of the combined entity, with shareholders to be offered a limited partial cash alternative.
However, Entain has informed MGM Resorts that the proposal “significantly undervalues” the company and its prospects, as well as requesting further information setting out the strategic rationale for the combination.
It noted that there was no certainty an offer would be made, and no indication as to what terms of this potential bid.
Under Rule 2.6(a) of the City Code on Takeovers and Mergers, MGM Resorts must make a firm intention to bid for Entain by 5pm on 1 February, or announce that it does not intend to make an offer.
Entain noted that it had confirmed the talks without the agreement or approval of MGM Resorts.