Draftkings withdraws – no takeover of entain

The online gambling market grows and grows. Fusions of different companies are no longer uncommon. However, it has now been known that a billion -dollar company has burst. Accordingly Entain will get in. A possible merger would be the biggest Gambling providers the world emerged. However, there were numerous statements in advance that considered a takeover as too complex.

No exact reasons for burst merger

In a statement, Draftkings explained that the decision that the company has withdrawn from the purchase after an extensive analysis. However, there were no more precise reasons from Draftkings or Entain, which is why the business was now bursting. Only from Draftkings-CEO Jason Robins could it be heard that the company had first-class product and technology skills and was therefore very confident that the management position could be expanded. The company aims at the North American market with its long -term growth plans. At the beginning of August, Draftkings swallowed another opponent with the provider Golden Nugget. However, the purchase price with $ 1.45 billion was significantly below the planned volume for Entain.

Second failure

The unsuccessful takeover was not the first attempt this year. In April, the casino operator MGM Entertainment had already made an offer for Entain. In contrast to Draftkings, $ 22.4 billion, MGM had only offered half. Entain had rejected MGM’s offer as clearly too low. However, MGM should have played an important factor when buying Draftkings, because MGB operates the sports betting provider BetmGM together with Entain. MGM’s responsible persons had therefore declared that they wanted to be involved in discussions with Draftkings. Financial analysts expressed that a takeover would only have been possible if Draftkings had separated from the 50 percent share of BetMGM. JPMorgan analyst Joseph Greff does not see the burst of the deal as a surprise and said that the business would have been too complicated. With regard to Draft Kings, the market reacted positively and the share increased by almost eight percent. In contrast, the Entain share lost 6.3 percent in value.

Takeover would have created new giants

The experts agree that a takeover of Entain through Draftkings would have provided the largest gambling provider in terms of the market value. Draftkings originally offered $ 20 billion for the 587 million shares of Entain. The company then increased by a further $ 2.4 billion. After the announcement of the takeover plans, the share prices from both companies shot significantly. Entain confirmed an offer but never said whether this was actually appropriate. At the first offer, those responsible from Entain had asked for the shareholders to observe the process and under no circumstances should fall into action. At the same time, Entain management emphasized the strengths of its own product.

How does it go from here?

Due to the legal takeover requirements, Draftkings is prohibited in the next six months that it can offer entertain again. However, it is speculated whether MGM will significantly increase its offer from spring this year. According to media reports, there are said to have already been discussions between MGM and Entain at the first offer of Draftking.