DraftKings makes bid to acquire UK rival Entain

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DraftKings, the US fantasy sports and sports betting company, has made a roughly £16.6bn offer for the UK gambling company Entain, the second time this year a rival has sought to acquire the business and consolidate the fast-growing US market.

Entain confirmed on Tuesday that it had received a takeover offer from the US company, “the consideration for which would include a combination of
DraftKings stock and cash”.

The bid was submitted in recent days and valued Entain at more than £25 a share, according to a person with knowledge of the approach. The exact terms of the offer could not be learned but CNBC, which first reported the approach, said it was comprised of mostly shares.

At £25 a share, the bid would value Entain shares at roughly £14.6bn before the inclusion of £2bn in net debt. The UK-listed company’s shares were valued at around £18 before news of the deal was first reported on Tuesday. They have since jumped 20 per cent to £22.83.

Shares in DraftKings dropped 6.5 per cent to $53.45 in mid-morning New York trading.

Entain was the subject of an £8bn takeover bid from the US casino group MGM in January, which it rejected.

The FTSE-listed company, which owns the Ladbrokes and Coral betting brands, has a joint venture with MGM to offer sports betting in the US, which could be under threat if the DraftKings bid is accepted.

After the private equity firm Apollo Global Management attempted to take over William Hill last year, William Hill’s US joint venture partner Caesars threatened to pull out if another bidder bought the business.

DraftKings has emerged as one of the most successful companies to go public through a special purpose acquisition company and is widely regarded as the catalyst for the subsequent boom in Spacs.

The company’s market value has risen more than sixfold since it first listed at a $3.3bn valuation in April 2020 through a merger with Diamond Eagle Acquisition Corp, a Spac led by veteran Hollywood executives Harry Sloan and Jeff Sagansky.

DraftKings didn’t immediately respond to requests for comment.