Entain has received two proposals from MGM Resorts in a bid to buy out the company. The company has requested more details from MGM as to the rationale behind the proposals.
MGM Resorts Bids for Entain Are a Fact, Says Company
Entain has followed up on a Wall Street Journal’s article detailing a bid by MGM Resorts to buy out the company, which it partners with for Roar Digital in the United States. Entain’s board of directors has confirmed that the company received two proposals from MGM Resorts International.
Based on the latest proposal, MGM Resorts or MGMRI for short will offer 0.6 MGMRI shares for each of Entain’s own shares. Based on the last available trading price on December 31, 2020, MGMRI’s proposal amounts to 1,383 pence per Entain share or 22% premium.
Based on this proposal, Entain shareholders would end up owning an estimated 41.5% of the total stock and MGM Resorts is willing to complement this with additional cash payment, explained as “limited partial cash alternative” in Entain’s press release this morning.
Based on that proposal and the current trading rate, Entain is valued at around £8.1 billion, but the board of directors will need more information from MGM Resorts as to what the rationale behind the proposal is.
In the meantime, Entain has urged shareholders to not take any action until there is more clarity on the matter. Entain has reminded in its official release that there is “no certainty that any offer will be made for the Company (Entain).”
Given the current details of the proposal, Entain believes that the pitch “significantly undervalues the Company and its prospects.”