Casino Life

News of MGM Getting Fresh Cash Make Entain FTSE 100’s Top Gainer

Shares of British gambling giant Entain on Wednesday soared to the top of the FTSE 100 on news that its US sports betting partner and former suitor MGM Resorts International will fetch $4.4 billion from the sale of certain assets.

In breaking news from across the pond, MGM Growth Properties, a real estate investment trust that spun off from MGM five years ago, announced that it has agreed to sell itself to fellow REIT VICI Properties in a $17.2 billion deal.

MGM, which is a majority stakeholder in MGM Growth Properties, is set to receive $4.4 billion in cash as part of the transaction which is expected to close sometime in the first half of 2022. The casino operator said that the sale will help it remain focused on pursuing growth opportunities in our core business, with significant financial flexibility to continue to deploy capital to maximize shareholder value.”

MGM getting fresh cash to work toward its goals prompted speculations that the company might renew its effort to acquire Entain and tap into the British firm’s sports betting experience as the practice has been legalized in multiple states over the past several years and its popularity has grown rapidly over the past year.

Is MGM Weighing Up a New Offer?

Entain’s shares rose 8% on Wednesday to an all-time high shortly after the announcement about the VICI-MGM Growth Properties tie-up hit the wire, and also became a top gainer on the FTSE 100 index.

Investors took out their bets on Entain due to renewed speculations that MGM might be lining up a new bid for Entain following its failed attempt to buy the company earlier this year.

Late in 2020, MGM tabled a $10 billion offer for the UK gambling operator and then revised that initial bid to $11 billion. Entain rebuffed both as too low.

Under takeover rules, the Las Vegas casino powerhouse was unable to present a new bid for the other company for six months. The restriction ended in mid-July.

MGM and Entain jointly operate the BetMGM sports betting and online gaming brand in multiple states across the US. The two companies formed their joint venture in 2018 after the US Supreme Court struck down a long-standing federal ban on athletic gambling.

Entain is not the only UK gambling firm to be eyed by a US casino company as they seek expertise to handle the ongoing revolution of the nation’s sports betting sector. Caesars Entertainment recently acquired William Hill, while Bally’s Corp. is set to buy Gamesys.

Source: Ladbrokes owner shares hit record high as investors bet on new MGM bid, Reuters, August 4, 2021

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