Entain Upheaval Could Prompt Fresh MGM Bid

Posted on: March 3, 2025, 04:30h. 

Last updated on: March 3, 2025, 09:59h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.
  • MGM could consider new bid for Entain following CEO exit
  • US casino operator tried to acquire BetMGM partner four years ago

Following the recent departures of three high-level executives, including now former CEO Gavin Isaacs, Entain Plc (OTC: GMVHY) could draw a new takeover bid from MGM Resorts International (NYSE: MGM), its partner on the BetMGM online wagering business.

Entain, GVC Holdings, Headlong, HMRC, Turkey bribery, Fox Williams
An Entain logo. Amid executive turnover at the company, it’s possible MGM returns with another takeover bid. (Image: ted Learning)

Joining Isaacs in leaving the UK-based gaming company were Australia’s Deputy CEO and CFO Lachlan Fitt, and Cameron Rodger. A recent report by Bloomberg Intelligence suggested that turnover could compel MGM to consider another run at Entain.

In January 2021, the Bellagio operator offered $11.06 billion for its BetMGM partner. The target rejected that bid as inadequate and those waters were muddied when DraftKings offered nearly as twice as much for Entain. Those talks ultimately fell apart due in part to MGM having rights of refusal regarding half of BetMGM potentially falling into a direct rival’s hands.

At the time of the casino giant’s initial bid for Entain, Shay Segev was chief executive officer of the target, but he surprisingly exited soon after the offer was made. He was replaced by Jette Nygaard-Andersen who resigned in December 2023, meaning that with the departure of Isaacs, Entain is in the market for its fourth chief executive officer in four years.

Entain/MGM Rumor Getting Old

In the roughly 50 months since MGM’s original offer for Entain, rumors about another bid have been among the most mentioned in the gaming industry, but nothing has come of that.

MGM management has made clear it would love to control all of BetMGM, but executives have also publicly stated another offer for Entain isn’t in the cards. That doesn’t mean a proposal to purchase the 50% of BetMGM it doesn’t own won’t materialize.

Entain’s CEO departure has created a leadership vacuum that could prompt MGM to consider acquiring Entain’s 50% stake in BetMGM, valued at $4.2 billion-$5.6 billion in our updated valuation framework,” according to Bloomberg Intelligence.

Buying that stake is more economical than acquiring the entirety of Entain and if that transaction were to occur, it would allay concerns regarding overlap with MGM’s LeoVegas unit. If MGM were to make an offer for the half of BetMGM it doesn’t already control, it could do so with debt and cash on hand.

Bid for BetMGM Could Placate Investors

Should MGM make an offer for the other 50% of BetMGM and execute the transaction, it could be to the liking of the buyer’s investors as well as Entain’s.

In such a transaction, MGM would avoid taking on too much debt and the need to potentially sell assets to mitigate LeoVegas overlap. Based on BetMGM’s market share, FanDuel’s estimated valuation, and DraftKings’ (NASDAQ: DKNG) market value, the price range for half of BetMGM mentioned by Bloomberg Intelligence appears fair.

As for Entain investors, they might welcome the influx of cash that comes from parting with the BetMGM stake rather than selling the entirety of the company at what would likely be a deep discount to the prices they paid for the stock.