US casino giant MGM Resorts has made an $11bn (£8.1bn) offer for British gaming company Entain, which owns Ladbrokes.
The move is the latest attempt by a casino operator to move into the online gambling business. In addition to its chain of High Street betting shops, UK-based Entain also owns a number of online sports betting and gambling sites, reports BBC.
Entain confirmed the offer, first reported by the Wall Street Journal, but said the price was too low.
It had recently rebuffed an earlier $10bn (£7.3bn) all-cash approach from MGM, the newspaper said.
In a statement, Entain said the latest bid approach “significantly undervalues the company and its prospects”.
MGM Resorts, which runs the Bellagio casino in Las Vegas, now has until the beginning of next month to decide whether to make a formal bid or to walk away.
FTSE 100-listed Entain. which renamed itself from GVC Holdings last month, describes itself as “one of the world’s largest sports betting and gaming groups operating in the online and retail sector”.
Along with Ladbrokes, it also owns brands such as Bwin, Partypoker, Coral, Eurobet, Gala and Foxy Bingo.
After news of the latest offer for the firm, investors started betting on Entain, pushing its share price up by more than 25% to £14.30 a share – above MGM’s offer of roughly £13.83 a share – a sign that market watchers are expecting a higher bid.
If the two firms do reach an agreement, it would follow another deal in September when MGM rival Caesars Entertainment agreed to buy UK-based William Hill for £3.7bn.
“Following Caesar’s offer for William Hill last year, a bid by MGM for Ladbroke’s owner Entain isn’t exactly a surprise,” said Nicholas Hyett an analyst at Hargreaves Lansdown.
“The two are working together to take advantage of the recent legalisation of sports betting in the US, a market worth many billions of dollars a year.”
