A potential bid for Entain or the 50% stake it owns in BetMGM is possible, suggests an expert analyst
Several years ago, the leading hospitality and gaming company, MGM Resorts International, filed a bid to acquire Entain Plc. The proposed takeover of the partner with which the company holds 50% ownership in BetMGM, a leading betting and gaming brand in the US, was ultimately rejected. However, MGM Resorts reportedly may consider a similar move once again this year, an analyst suggests.
Acquiring 100% of BetMGM Is One Option for MGM Resorts
The last time the company attempted to acquire Entain was in 2021 when it tabled a $11.06 billion bid. The response of Entain to MGM Resorts’ offer wasn’t positive as the former deemed the acquisition proposal inadequate. Since then, rumors about another potential bid by MGM Resorts for BetMGM or Entain have circulated but none have reached negotiations.
Now, according to Chad Beynon, an analyst with Macquarie, who was recently quoted by Casino.org, MGM may once again explore options for the acquisition of Entain or at least the remaining stake in BetMGM. BetMGM is a joint venture between the two companies and a recognizable betting operator with a strong presence across the United States.
The analyst explained that BetMGM has “carved out a solid position as the number three US Online Gaming operator, occupying the leading position among the ‘Tier 2’ companies.” He spoke about the popular operator’s recently launched single-app wallet in Nevada and reported profitability in Q3. Beynon added: “We expect BetMGM will deliver its first year of profitability in 2025.”
In that line of thought, it would be sensible for MGM to acquire the 50% stake in BetMGM from Entain at such a pivotal moment. Such an acquisition may also be seen as a good thing for Entain, considering some investors have previously urged the company to consider raising cash through divestment of assets. Thus, the potential sale of Entain’s 50% stake in BetMGM may represent a win-win move for the company and MGM Resorts as well.
Bid for Entain by MGM Is Possible
Another potential strategic move MGM may consider is a bid to acquire Entain. In the words of Beynon: “While the company attempted to acquire its joint venture partner in Entain in 2021, we believe likelihood could increase given management transition, current share price (Entain shares are -36% over the last year, market cap of ~$4.8 billion), and potential synergies.”
While a bid for Entain by MGM is possible, it is likely that the latter company may find it more financially suitable to try and acquire the 50% stake in BetMGM rather than going for its parent company. Still, it’s important to note that neither company has yet publicly announced it is in talks about a potential merger or divestment of assets.
Earlier this month, MGM announced a massive refurbishing project for its MGM Grand Hotel & Casino on the Las Vegas Strip. As one of the most ambitious renovation projects for the company yet, the refurbishment has a price tag of a staggering $300 million. Upon completion of the renovation, MGM Grand would have remodeled all of its 4,212 rooms and suites in its main tower.
