MGM Resorts wants to buy Entain plc to expand its footprint in online-gambling

In a report on Sunday, the Wall Street Journal said that MGM Resorts International (NYSE: MGM) plans on buying Entain plc. The agreement with the British gaming company, the report added, will help the casino operator expand its footprint in the online gambling business.

MGM Resorts is currently exchanging hands at £23 per share versus a significantly lower £5.22 per share in March when the impact of the ongoing Coronavirus pandemic was at its peak. If you want to invest in the stock market online, you will need a reliable stockbroker – here’s a list of the top few to make selection easier for you.

MGM Resorts had originally offered roughly £7.32 billion to buy Entain plc

According to the Wall Street Journal, MGM Resorts had originally offered roughly £7.32 billion in cash late last year to buy Entain plc that currently owns renowned gambling brands, including Ladbrokes. The offer that translated to £12.85 per share was rejected by the British sports betting and gambling company.

The exact details of the rebuffed offer on Sunday, however, are yet to be known. But as per Reuter’s calculation, the offer values Entain plc at £13.83 per share or £8.09 billion. In a statement on Monday, the Isle of Man-headquartered company said that the bid still undervalued it.

MGM Resorts is yet to make an official statement on the news on Sunday. The American global hospitality and entertainment company announced changes in the corporate leadership team in December.

Under the brand names Coral and Ladbrokes, Entain currently operates over three thousand betting shops. It rivals Flutter Entertainment and Willian Hill in the United Kingdom.

Analyst Nicholas Hyett’s comments on the news on Sunday

Analyst Nicholas Hyett of Hargreaves Lansdown commented on the news on Sunday and said:

“Following Caesar’s offer for William Hill last year, a bid by MGM for Ladbroke’s owner Entain isn’t exactly a surprise. The two are working together to take advantage of the recent legalisation of sports betting in the US, a market worth many billions of dollars a year.”

Caesar had shown interested in taking over William Hill last year in September for £2.9 billion.

MGM Resorts performed slightly downbeat in the stock market last year with an annual decline of close to 5% in 2020. At the time of writing, it is valued at £11.38 billion and has a price to earnings ratio of 11.25.