US-based betting firm Draftkings Inc (NASDAQ:DKNG) has announced it will not be making an offer to acquire Entain PLC (LON:ENT).
Q3 2021 hedge fund letters, conferences and more
Entain management confirmed the two were ending discussions and said it would remain committed to the growth and sustainability strategy as laid out this summer.
The shares fell 6.7% following the announcement
DraftKings Will Not Be Acquiring Entain
Laura Hoy, Equity Analyst at Hargreaves Lansdown:
“DraftKings closed the door on a possible Entain acquisition, which disappointed the market. Shares fell as investors digested the news, but retained some of the buoyancy that came with the acquisition news back in September. That’s because the DraftKings offer confirmed what the market had already been thinking—Entain’s in a strong position to gobble up market share in the developing US market.
BetMGM, Entain’s joint venture with US-based MGM, was likely a big part of the reason for DraftKings’ interest. But MGM’s position as a third wheel in negotiations may have complicated matters. We suspect this setup will keep any other offers from rolling in unless they come from MGM itself. The US Casino operator already tested those waters and came up empty-handed, so we don’t expect to see much M&A activity in Entain’s future.
With that said, Entain’s underlying value proposition remains intact and the absence of M&A speculation means investors can focus firmly on the group’s potential as a stand-alone act.”
About Hargreaves Lansdown
Over 1.67 million clients trust us with £138.0 billion (as at 30 September 2021), making us the UK’s number one platform for private investors. More than 98% of client activity is done through our digital channels and over 600,000 access our mobile app each month.
