The Las Vegas casino operator MGM Resorts will not pursue a bid for the UK gambling company Entain, which owns brands such as Ladbrokes and Coral, after having an £8.1bn offer knocked back earlier this month.
MGM had until 1 February to make a firm offer under UK takeover rules, after it emerged that the casino business had made a bid to buy Entain, with which it already operates a US joint venture called BetMGM.
The US company said it had decided not to make a new proposal “after careful consideration and having reflected on the limited recent engagement between the respective companies”.
Entain’s shares had been trading at a level that implied MGM would increase its £8bn offer but the US company’s decision to walk away wiped 15% off the Entain share price on Tuesday afternoon, taking its stock market value down to £7bn.
“BetMGM, our US sports betting and online gaming venture with Entain, remains a key priority for the company as we continue to leverage our preeminent physical gaming, entertainment, and hospitality platform to expand digitally,” said Bill Hornbuckle, the chief executive of MGM Resorts International.
“We believe that BetMGM has established itself as a top-three leader in its markets and we remain committed to working with Entain to ensure its strong momentum continues as it expects to be operational in 20 states by the end of 2021.”
MGM swooped for Entain earlier this month, after its US rival Caesars Entertainment bought William Hill for £2.9bn, underscoring the appetite for UK betting companies’ technology and experience in the newly regulated US gambling market.
Since the US supreme court legalised sports betting in 2018, a flurry of British gaming businesses have established beachheads in the US, exploiting expertise gleaned from years of operating freely in the UK.