The £8.09bn takeover battle with MGM and Entain has taken an ugly turn as Entain's market cap fell sharply by 12.5% to £7.3bn after MGM drops out
Entain's shares plummeted 18% on the London Stock Exchange and the market cap fell by 12.5%, after MGM Resorts dropped its takeover interest.
Just last week, the £8.09 billion ($11 billion) takeover battle with MGM and Entain took a left turn as Entain's CEO Shay Segev quit. In addition, Entain's largest shareholders were already skeptical of the takeover, deeming the £8.1bn proposed undervalued the company.
Entain, formerly known as GVC and parent company to Ladbrokes, Bwin, Gala, and Coral to name a few, saw its share price falling by 18% on the London Stock Exchange to £1,185p per share. The market cap fell sharply by 12.5%, valued at around £7.3bn. Share price has slowly recovered, currently standing at £1,254.00.
after careful consideration and having reflected on the limited recent engagement between the respective companies regarding MGM’s rejected all stock proposal at an exchange ratio of 0.6x, it doesn’t intend to submit a revised proposal and it will not make a firm offer for Entain.
Entain commented that it had a "clear growth and sustainability strategy" and:
[Entain will continue] to work closely with MGM to drive further success in the U.S through the BetMGM joint venture.
The news comes as Entain Plc is in talks to appoint a new CEO following the sudden departure of Shay Segev, pursuing a role with higher financial rewards at DAZN sports streaming site.
The Financial Times reports that a source close to the negotiations between Entain and MGM Resorts stated:
His departures threw everything up,
Sources report that Entain Plc are in 'advanced discussions' to appoint Jette Nygaard-Andersen as their new chief executive officer, making her the first female CEO for any British-listed gambling group.
While the deal fell short, it would have created a digital gambling powerhouse. Ultimately, the gaming industry has entered a golden era for M&A, as seen by Caesars Entertainments £2.9bn acquisition of UK bookmaker William Hill last year.
Source: Financial Times
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