Ladbrokes Owner Sees Shares Surge After Rejecting MGM Takeover Bid

By Martin Green10 January 2021
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MGM Rebuffed in Ambitious Bid

Shares in Ladbrokes owner Entain surged by around 32% this week after its board rejected an £8.1 billion takeover bid from US group MGM resorts. The offer of 1,383p per share represented a 22% premium on Entain’s market valuation at the time, but the board said it significantly undervalued the group. It also asked for more details on the strategic rationale behind potentially merging the two groups.

MGM Resorts owns iconic properties MGM Grand, Bellagio and Mandalay Bay in Las Vegas. It has teamed up with Entain for a 50/50 joint venture called BetMGM, which aims to become the market leading sportsbook in the US market. Entain, which was previously called GVC Holdings, owns Ladbrokes, Coral, Bwin, Sportingbet, Foxy Bingo and various other brands.

It revealed in a statement that it has rejected multiple bids from MGM. Under market rules, MGM now has until 5pm on February 1, 2021, to make a better offer, or walk away. Industry commentators believe MGM shareholders may not be able to go any higher, and a rival bidder could now emerge.

It follows Caesars Entertainment’s successful takeover bid for William Hill. Caesars, formerly Eldorado Resorts, teamed up with William Hill for a similar US joint venture and then mounted a takeover bid.

Entain to Acquire Swedish Firm

Entain continues to conduct business as normal in the wake of MGM’s failed takeover bid. It revealed this week that it is set to buy Swedish online gambling operator Enlabs in a £250 million deal. The offer is for SEK40 per share, and the Enlabs board has backed it, so the deal is expected to complete in the first quarter of 2021.

Enlbsa operates the Optibet brand, and primarily serves the Baltic nations of Estonia, Latvia and Lithuania. Entain said its regional market and brand strength, combined with its own scale, proprietary technology, product, marketing and regulatory expertise, would be a strong fit, and it hopes to expand into new territories.

“The acquisition of Enlabs is perfectly aligned with our strategy of expanding across new regulated international markets,” Entain chief executive Shay Segev said. “We are hugely excited by the growth opportunities it presents both in its existing markets and through new market opportunities. Enlabs is already a strong and rapidly growing business in its own right, but we now have a fantastic opportunity to turbocharge its growth by leveraging the power of our unparalleled proprietary technology, scale, product and marketing expertise.”

Enlabs board chairman Niklas Braathen added: “When Entain’s interest to acquire Enlabs emerged, we instantly saw the strategic logic. Entain’s experience and track record in many different geographic markets, together with its market-leading proprietary technology and world-class marketing skills are key attractions for Enlabs as we look to grow in the Baltics and beyond.”

MansionBet Renews Racing Partnerships

MansionBet has renewed its sponsorship of race meetings with Arena Racing Company and Jockey Club Racecourses for 2021. It means that MansionBet will sponsor more than 360 races across 60 meetings at Goodwood, Newbury, Huntingdon, Market Rasen, Ffos Las and other venues. The bookmaker will sponsor the opening Saturday at Goodwood and Newbury’s Spring Cup, among others.

Chief marketing officer David Murphy said: “We are both excited and proud to continue our support of British racing into 2021. Having taken huge steps forward to improve our racing product over the last 12 months, we continue to strive to deliver the best offering to our customers. 2020 was a challenging year for racecourses across the country and we’re pleased to be able to put our name to over 60 events at 26 different venues in 2021.”

David Leyden Dunbar, ARC director of partnerships, added: “It’s been terrific to work with the team at MansionBet since 2019 and to watch our partnership along with the brand’s commitment to British Horseracing go from strength to strength. Our racecourse teams look forward to working with them again in 2021 and delivering a fantastic schedule of racing across many of our courses throughout the year.”