MGM will not be acquiring Entain.
“After careful consideration and having reflected on the limited recent engagement between the respective companies regarding MGM’s rejected all stock proposal at an exchange ratio of 0.6x, [MGM] does not intend to submit a revised proposal and it will not make a firm offer for Entain plc.
Entain shares fell 16% in London following the news.
The story so far for MGM and Entain
BetMGM co-parent Entain previously rejected two takeover offers from MGM. The last one, worth around $11 billion, valued Entain at 1,383 pence per share. That equaled a 22% premium to the share price at the end of 2020.
However, analysts and the market expected MGM to make another, higher offer. MGM’s largest shareholder IAC even offered an extra $1 billion to help get the deal done.
The casino giant did not specify the reasons for its about-turn. But the recent departure of Entain CEO Shay Segev after just five months in the role may have played a factor.
Entain’s share price was last down 16% to 1,189p.
What now for BetMGM?
The attention now turns to the joint venture between the two firms and their BetMGM brand. Analysts have previously warned failed merger talks could imperil the JV.
However, MGM CEO Bill Hornbuckle said it remained a “key priority.”
“We believe 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,” Hornbuckle said.
In a separate statement, Entain also played down any concerns about the JV.
We look forward to continuing to work closely with MGM to drive further success in the US through the BetMGM joint venture,” Entain said.
MGM’s share price was last up 5% in pre-market trading.