DraftKings withdraws bid to buy global gaming company Entain

DraftKings withdraws bid to buy global gaming company Entain

DraftKings has backed down from its pursuit of purchasing gaming conglomerate, Entain, at least for the time being. 

Draftkings – Entain Impasse

The multi-vertical gaming operator confirmed in a press release last October 26 the decision to put its interest in buying Entain on hold. 

Draftkings was reportedly planning to place a $20 billion offer on the table in an attempt to take over the ownership and operation of the Isle of Man-based firm last month. After starting as a Daily Fantasy Sports operator, the company’s business interest has rapidly grown over the last decade, expanding into online casinos and sports betting operations.

Following its confirmation of DraftKings’ acquisitive interest, Entain issued a Put Up or Shut Up’ deadline requiring any interested party to announce its intentions within a given window. 

Entain had given Draftkings until November 16, 2021, to declare a firm intention to make an offer officially. After careful deliberations, the company’s top decision-makers concluded that it’s best to withdraw its interest; however, it did not rule out the possibility of reviving it at a later date.  

DraftKings’ announcement means the company agreed to be bound by restrictions under rule 2.8 of the City Code on Takeovers and Mergers for six months following this date. It only means the operator cannot make any proposal for at least half of the year.

Entain holds the right to wave the above statement and restrictions in rule 2.8 of the code, provided it falls under the circumstances stated in the code, including the agreement of the board of directors of Entain.

Draftkings may also circumvent the rule by announcing a firm intention to purchase by or on behalf of a third party. The takeover panel, though, has to determine that there has been a material change of circumstances. In other cases, it can also be done following an announcement of a whitewash proposal or reverse takeover. 

For the second time in the past 12 months, Entain has received acquisitive interest from a US-based gaming company. Last January, MGM also staged a bid to merge with Entain; unfortunately, the latter turned down the former’s $11 billion offer on the basis that it will significantly undervalue the company’s future growth prospects.” The offer is reportedly worth 0.6 MGM shares for each Entain share, representing a value of 1,383 pence per share and a premium of 22 percent.   

Quotes from the Press Release

Jason Robins DraftKings CEO, co-founder and chair of the board, explained the decision in the press release: “After several discussions with Entain leadership, DraftKings has decided that it will not make a firm offer for Entain at this time. 

“Based on our vertically-integrated technology stack, best-in-class product and technology capabilities and leading brand, we are highly confident in our ability to maintain a leadership position and achieve our long-term growth plans in the rapidly growing North America market.”

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About Lou De Aguila

Lou Ramon Aguila is a contributor for Golden Casino News. He has a degree in BSBA Legal Management with great interest in high-profile legal cases involving sports personalities. An ultimate sports junkie, he covers just about everything in the sporting world with an emphasis on the NBA, NFL, and MLB. In his past time, Lou loves to read manga, watch anime and critique pro-wrestling matches.