DraftKings is making a $20 billion offer to acquire Entain online betting company in the company’s stock alongside cash.
DraftKings Inc (NASDAQ: DKNG) stock closed the trading on Tuesday, September 21, at $52.77, down 7.42%. According to news outlet CNBC, the American daily fantasy sports contest and sports betting operator is ready to acquire UK online sports betting company Entain PLC (LON: ENT). Consequently, ENT stock closed September 21 trading at £ 2,261.00, up 18.04%.
According to people familiar with the company, DraftKings is making a $20 billion offer to acquire Entain online betting company in the company’s stock alongside cash.
Notably, Entain had a reported market valuation of approximately $18 billion before the news but has since spiked. Previously, Entain had filed with the London stock exchange confirming that it had received an acquisition proposal from DraftKings.
Although the filing did not contain any financial settlement, Entain urged its shareholders to take no action at this time. Notably, the United Kingdom’s gaming platform had rejected an earlier proposal of $11 billion in stocks by MGM Resorts made earlier this year. The company cited that the proposal had significantly undervalued its business outlook.
The market reacted significantly owing to the fact that Entain is a market leader in the United Kingdom whilst DraftKings is a giant company in the United States. Hereby making their combined effort much stronger than before.
Notably, MGM Resorts has a partnership with Entain that operates in the United States dubbed BetMGM. Consequently, MGM Resorts’ inputs are required in order to finalize the process.
“Any transaction whereby Entain or its affiliates would own a competing business in the U.S. would require MGM’s consent,” the company said in a statement. “MGM will engage with Entain and DraftKings, as appropriate, to find a solution to the exclusivity arrangements which meets all parties’ objectives.”
DraftKings Stock and the Market Outlook
DraftKings stock has had mixed results during the Covid pandemic. According to market analytics provided by MarketWatch, DKNG stock has gained approximately 13%, and 5% year to date and three months respectively through Tuesday. However, the company’s stock market remains 2.17% down in the past year, and now over 6% in the past month.
With 403.42 million outstanding shares, DraftKings has a reported market valuation of approximately $45.4 billion. In the past 52 weeks, DKNG stock has ranged between $34.90 and $74.38. Despite the recent dips, Wall Street analysts are optimistic the company will deliver positive earnings results in the coming quarters. A study conducted by MarketWatch indicates 27 ratings gave DKNG stock an average of Over rating.
On the other hand, Entain stock has gained approximately 165%, and 99% in the past year and YTD respectively through Tuesday.
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