DraftKings Pulls Out of Entain Negotiations
The highly-popular fantasy sports operator DraftKings has come out and revealed that it no longer intends to pursue its interest in acquiring international sports betting and gambling company Entain. The news comes after DraftKings made a $22 billion offer to take over Entain at the end of September 2021.
DraftKings has revealed that it no longer has intentions to pursue its interest in acquiring international sports betting and gambling company Entain. ©mohamed_hassan/Pixabay
DraftKings Says it is Confident in its Own Brand and Technology
Fantasy sports operator has announced that it will no longer pursue its attempted takeover of sports betting and gambling company Entain. The company made the decision following further talks with Entain’s board of directors.
Chief executive of DraftKings Jason Robins reaffirmed the business’ confidence in its own technology and brand to help it achieve its long-term growth plans in the constantly growing US market:
“After several discussions with Entain leadership, DraftKings has decided that it will not make a firm offer for Entain at this time. Based on our vertically-integrated technology stack, best-in-class product and technology capabilities and leading brand, we are highly confident in our ability to maintain a leadership position and achieve our long-term growth plans in the rapidly growing North America market.”– Jason Robins, Chief Executive, DraftKings
Entain Will Continue Strengthening its Market Positions on its Own
In the meantime, Entain’s board stepped out and used the occasion of DraftKing announcing the cancelation of its bid to acquire the company to hype up its future as a strong, independent business:
“Entain has an outstanding track record of growth having delivered 23 consecutive quarters of double digit online NGR growth, representing a three-year CAGR of 19% across 2021. As a result the Board is confident in Entain’s ability to continue to deliver material value for its shareholders going forward.”
The company will refocus on its efforts to further strengthen its market position, its expansion into the burgeoning US market, and its growth in newly-regulated legal gambling markets.
Entain also revealed that it would begin exploring new interactive entertainment opportunities such as esports, employing its vast range of products to enhance customer acquisition and retention while boosting player loyalty.
DraftKings made two generous proposals to acquire Entain in September 2021. The first offer, at £25.00 per share, comprising cash and stock, was rejected by Entain’s board. It then returned on September 19th, 2021 with a higher bid of £28.00 per share.
DraftKings’ Revised Offer Came After Entain Rejected Bid by MGM
Back in September 2021, Entain confirmed that fantasy sports operator DraftKings had approached it with an offer of $22 billion to acquire the company, after Entain had rejected a previous offer of $20 billion.
DraftKings’ initial offer, which consisted of a combination of group shares and cash, was set at £25 per share, valued at an approximate total of £14.6 billion. Following the offer’s rejection, it returned with a revised price of £28 per share, valuing Entain at £16.5 billion.
DraftKings clarified that the offer represented a 46.2% premium on Entain’s closing share price on September 20th, 2021. Entain CEO, Jette Nygaard-Andersen, was sure to note at the time that the offer was still being considered by board members.
This proposal wasn’t the first attempt to acquire Entain in 2021. At the beginning of the year, Entain made headlines by rejecting an impressive $11 billion offer from MGM Resorts.
Entain Acquired Esports Platform Unikrn in October 2021
For its part, Entain has also been making moves in the acquisition world this year, announcing earlier this month in October 2021 the completion of its takeover of esports platform Unikrn. The move will support Entain’s launch into the esports market, which is currently scheduled for 2022.
The deal will see Entain purchase Unikrn’s products, platform and technology, as well as taking on Unikrn’s international team of 50 employees. Launched in Seattle, Washington in 2014, the esports provider is now a market leader, offering real money and token-based wagering on competitive video game competitions.
Entain has been setting its sights on the ever-popular esports market for some time now, taking on former Managing Director of Esports at Twitch Justin Dellario in August 2021. CEO Jette Nygaard-Andersen expressed excitement at the news of Dellario joining the company:
“One exciting opportunity is the growing esports skill-based wagering market. We are building the first scalable platform to address this market and I am delighted that Justin Dellario is joining us to lead our growth in this new area.”
