ENTAIN makes its money from gambling – but now it is the company’s board who are being asked to take a punt on a £16bn takeover offer.
The betting giant – which owns the Ladbrokes and Coral brands, as well as a swathe of online games names such as Gala Bingo – revealed last month that it had received two approaches from US rival Draftkings, the latter pricing Entain’s shares at 2800p apiece.
Shareholders will be watching Entain’s latest trading update on Tuesday for any sign of what the company plans to do. It rejected Draftkings’ initial 2500p offer, and in its latest announcement in September said it was ‘carefully considering’ the higher bid.
But Entain has yet to show its hand, with the board simply saying that it ‘strongly believes in the future prospects of the company’. When the firm releases its third-quarter update next week, shareholders will be watching closely to see if those prospects are coming to fruition.
Nicholas Hyett, an equity analyst at Hargreaves Lansdown, said: ‘Signs of strong progress will be welcome and might convince management to turn down the offer on the grounds that it undervalues the business. The US joint venture with MGM in particular will be in the spotlight, since it’s probably the gem that initially interested Draftkings in the business. The division reported net gaming revenues of $357m in the first six months of the year and, all being well, should do even better in the second half.’
Meanwhile, Entain has not decided whether to hand back furlough cash it claimed during the pandemic.