MGM Resorts reportedly looking to renew Entain buyout bid

MGM Resorts, a longstanding partner of British gambling group Entain, is possibly in renewed talks to try and buy out the FTSE-100 company. Entain, which owns Ladbrokes, Gala Bingo, Coral, and other prominent brands, is working closely with MGM Resorts and the company it helped set up, BetMGM.

If true, this would be the second time that MGM Resorts has attempted to buy out its partner, with the previous launch coming by surprise in January 2021 as Entain was undergoing a leadership change.

The administration, though, turned down the offer, explaining that the estimated valuation of the deal, around £8.1bn, was too low to merit further exploration unless MGM Resorts agreed to amend the conditions of their bid. They did not.

MGM Resorts is supposedly preparing to bid for the company as the UK Gambling Commission completes the White Paper review of the country’s new gambling laws, a long-anticipated and long-delayed process. Not everyone is surprised by the news, though, as a Deutsche Bank analyst pointed out last week that the alliance between the two entities would, in fact, be natural.

Others piled on and said that the wedding between Entain and MGM Resorts is a certain thing, including CTFN, a media, which described it as "inevitable." When MGM Resorts withdrew its bid in 2021, nobody was really certain that the company would try again in the foreseeable future, but apparently, MGM has been planning it all along.

BetMGM is also due to put a trading update on Thursday, January 26, which could bring a little more clarity in what it has planned next. Entain and MGM Resorts' joint efforts through BetMGM have demonstrated the two companies’ ability to work well together, but this can now be taken a notch further.

Essentially, MGM Resorts stands to benefit from Entain’s advanced in-house technological stack and offer, and Entain itself will gain further access to one of the world’s biggest iGaming and sports betting markets, which is still undergoing rapid expansion and development.

Entain has proven a tough nut to crack though, as MGM Resorts is not the only entity to have courted it. After MGM Resorts’ bid, DraftKings thought it had a better chance of winning over the company, but an attempt to bring it in also fell short of success. While there were some previous rumors about MGM Resorts’ sustained interest in Entain’s acquisition, this is the first time industry analysts are talking about it more confidently.