US sports betting giant DraftKings has made an offer to buy UK gambling group Entain for a reported $20bn (€17bn).
Entain – which owns the Ladbrokes and Coral bookmaker firms and online gambling and gaming sites likes PartyPoker, Gala Bingo, Foxy Bingo and Bwin – confirmed the approach from the US fantasy sports betting company.
Entain’s shares surged 19% while the DraftKings stock fell by more than 6% on the back of the news.
The offer price is roughly 2,500 pence per share, according to CNBC’s David Faber, representing a premium of about 30%. The deal will be largely in DraftKings stock along with a cash component, he added.
DraftKings – which counts basketball legend Michael Jordan as a significant shareholder and board member – is viewed as the main US rival of FanDuel, which is owned by Paddy Power parent group Flutter Entertainment.
The deal frenzy comes as US-based companies look to expand overseas and seek to tap the expertise of London-based firms as the US opens up to sports betting.
Demand for online betting also boomed during the pandemic as customers took to playing from home when casinos and betting shops were off-limits.
Entain had, in January, rejected an $11bn offer from US-based MGM Resorts International, saying it undervalued the company.
In a successful transatlantic deal, Caesars Entertainment acquired Britain’s William Hill in a £2.9bn deal earlier this year.
DraftKings, which allows users to enter daily and weekly fantasy sports-related contests, submitted an offer a few days ago, Mr Faber said, adding that the cash-and-stock mix was unclear.
Entain said DraftKings must announce a firm intention to make an offer for the company or announce that it does not intend to make an offer by October 19.
• Reuters and Irish Examiner