MGM Resorts, the US casino giant, has announced that it will no longer be making any more partnership offers to Entain, the owner of Ladbrokes betting shops, after several failed attempts.
Both businesses were expected to benefit from the proposed deal. Entain is an online video gaming and sports betting industry leader, but without much experience in the casino gaming industry. The potential partnership was expected to make up for that with MGM’s casino gambling experience. On the other hand, the partnership will bolster MGM’s plans in penetration the online gaming and sports betting market, allowing the casino giant to compete more with its competition already in the online casino and betting market. This is particularly important for MGM as it has suffered significant losses due to the imposed COVID-19 restrictions.
This potential partnership between MGM and Entain was expected to offer premium online casino and sports betting experience to players.
Last year, the casino giant offered the UK betting chain $10 billion, which it refused, explaining that the offer was undervalued. MGM offered another $11 billion bid earlier this year, including both cash and stocks, in case Entain wasn’t interested in just cash profits.
Soon after, Barry Diller, the billionaire and chairman of IAC, the majority shareholder of MGM Resorts, was asked to comment on the future deal and he said that he was uncertain that the acquisition was going to come through. He also added that IAC is prepared to invest more in MGM if that would help in pushing the deal through.
Two weeks after the latest offer was made, MGM revealed that it had given up on the attempt to buy the UK bookie. MGM Resorts also revealed that will continue to grow with Entain or without Entain on the online gaming and sports betting industry in the UK.
According to insider information, the resignation of chief executive Shay Segev during the negotiation phase played a role in the failed deal. Although now the former chief executive confirmed that he agreed with the decision of the Board to refuse the bid from MGM.
MGM and Entain’s partnership initially began in 2018 with their £327/$450 million 50/50 sports betting joint venture. According to Numis Securities’ director of travel and leisure, Richard Stuber, this relationship was not as strong as it was meant out to be, and that this has played an important role in recent events. He also added that Entain did not see any counter-bidders during the offers phase.