MGM CEO Hornbuckle Not Showing Hand on Possible Cosmopolitan, Entain Acquisitions
Posted on: September 14, 2021, 09:14h.
Last updated on: September 14, 2021, 02:21h.
MGM Resorts International (NYSE:MGM) is at the center of a pair of the gaming industry’s biggest takeover rumors. But CEO Bill Hornbuckle isn’t divulging what the company’s plans are on those fronts.
Speaking Monday with analyst Joseph Greff at the JPMorgan Gaming, Lodging, Restaurant & Leisure Management Access Forum in Las Vegas, the MGM chief executive didn’t mention the Cosmopolitan by name but acknowledged it’s a “compelling” property.
There is probably some synergies to be had there, for sure, that only we could probably unlock,” said Hornbuckle. “I don’t want to comment on it any further than that. I do want to diversify. We have a lot of Las Vegas to begin with, but it’s a compelling asset. But time will tell.”
In recent weeks, rumors about the fate of Cosmopolitan, which is located near some MGM venues, are intensifying. Owner Blackstone (NYSE:BX) is reportedly shopping the glitzy venue at a price tag of at least $5 billion, limiting the audience of credible, potential suitors. MGM’s rising cash stockpile and existing relationship with the private equity firm have the casino giant at the center of related takeover speculation.
Entain Takeover Talk
Predictably, Hornbuckle’s time at the JPMorgan conference also included commentary on the relationship with Entain Plc (OTC:GMVHY) – MGM’s 50/50 partner on the booming BetMGM unit.
Earlier this year, the casino giant made an $11.06 billion offer for the British sportsbook operator but was turned away. However, with the North American iGaming and sports betting industries taking off, and MGM’s cash position doing the same, there’s ample speculation MGM will return with another bid before the end of 2021.
Horbuckle didn’t comment to that effect, but he acknowledges MGM critiques itself for ceding half of the BetMGM business.
“The reality is we’re number two in the marketplace today,” he said in the conversation with Greff. “When you add it all up, we are, because we got there so quickly. And so as much as we bang ourselves in the head why we gave away half of our business, the reason we did is so that we could be in these markets, and it’s clearly been proven first to market, it has one.”
The MGM CEO didn’t comment directly on making another offer for Entain. But he noted the top two games on Entain’s iGaming platform carry the MGM and Bellagio brands. The Ladbrokes owner is viewed as the most likely UK-based company to be acquired before the end of this year.
Hornbuckle on Other US Opportunities for MGM
Regarding other US markets, MGM could expand into, Hornbuckle said, “If you wave your magic wand,” Texas is a preferred destination. He adds he doesn’t see the operator running a land-based casino in Florida because of tribal dominance in that state.
Hornbuckle also said Georgia is a spot gaming companies have eyed for some time. Regarding Chicago, the MGM boss said, “It’s complicated.”
“I don’t know that you can win in Chicago based on the set of rules that we understand today,” he said.