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DraftKings gets extension to pursue $22.5B takeover deal

Updated October 19, 2021 - 1:06 pm

Entain PLC, MGM Resorts International’s joint venture partner in BetMGM, is giving DraftKings one more month to make its $22.5 billion takeover offer formal, the company announced Tuesday.

Entain said in a statement Tuesday that the company’s board has been in discussions with DraftKings to explore the “merits and feasibility” of a potential deal. In September, DraftKings made an initial stock and cash pitch to acquire the U.K online sports betting giant, with the proposal valued at roughly $22.5 billion.

DraftKings originally had until Tuesday to make a formal offer under U.K. takeover laws. But Entain requested and received an extension from U.K. regulators, and set 5 p.m. Nov. 16 as the new “Put Up or Shut Up” deadline for the proposal.

The potential deal would have significant implications for MGM Resorts, which jointly owns BetMGM with Entain in a 50/50 joint venture. Because of that partnership, MGM has said that it believes any transaction between the Entain and DraftKings would require MGM’s consent.

MGM has been upfront that it wants full control of BetMGM and even made its own push to acquire Entain earlier this year. That $11 billion offer was rejected by Entain, who said said the proposal undervalued the company.

“MGM believes that having control of the BetMGM joint venture is an important step towards achieving its strategic objectives,” the company said in a statement in September in response to DraftKings’ initial proposal. “MGM will engage with Entain and DraftKings, as appropriate, to find a solution to the exclusivity arrangements which meets all parties’ objectives.”

Contact Colton Lochhead at clochhead@reviewjournal.com. Follow @ColtonLochhead on Twitter.