MGM’s biggest shareholder backs offer for Ladbrokes owner Entain
Casino operator MGM’s biggest shareholder InterActiveCorp (IAC) has backed its £8bn bid for Ladbrokes owner Entain.
In a statement MGM said IAC considers the offer to be “compelling” and believes the deal would “position the combined company as a pure play omni-channel global leader in gaming and entertainment”.
Earlier this week Entain, which also owns Coral and Partypoker, rejected MGM’s takeover approach because it “significantly undervalues the company and its prospects”.
It added that it had asked the casino operator to provide further information about the “strategic rationale” of a tie-up between the two.
The proposal offered 0.6 shares for each Entain share, valuing it at just over £8bn and a 22 per cent on Entain’s share price.
MGM has indicated that a partial cash alternative could also be made available to Entain, which IAC today said it would consider funding a portion of.
The offer is another attempt for MGM to move into the gambling business following a relaxation of rules in the US in 2018.
InteractiveCorp said a deal with Entain “would accelerate the growth and market penetration of BetMG, a leader in the US, which we believe to potentially be the largest online sports betting and Igaming market in the world”.
MGM has until 5pm on 1 February to either make a firm offer or withdraw its interest.