Digital sports gaming company DraftKings will make a $20 billion offer made up of mostly DraftKings stock and cash for U.K. online sports betting company Entain, according to a CNBC report on Tuesday (Sept. 21) that cites people familiar with the matter.
News of the proposed acquisition caused Entain shares to increase about 17% from about £13.2 billion ($18 billion) in trading in London on Tuesday, while DraftKings’ stock dipped about 6% as a result of the revelation.
Entain’s board of directors confirmed the DraftKings proposal in a filing with the London Stock Exchange, according to the CNBC report. There was no information about the price of the offer in the filing.
“A further announcement will be made as and when appropriate,” Entain noted in the filing. “Shareholders are urged to take no action at this time.”
Entain turned away MGM Resorts’ $11 billion all-stock offer earlier this year, although the companies co-own BetMGM, a U.S.-based online sports betting platform. MGM must approve any deal for Entain’s U.S.-based assets.
Entain owns U.K. poker and gambling companies Coral, Ladbrokes and PartyPoker.
“Any transaction whereby Entain or its affiliates would own a competing business in the U.S. would require MGM’s consent,” the company said in a statement. “MGM will engage with Entain and DraftKings, as appropriate, to find a solution to the exclusivity arrangements [that] meets all parties’ objectives.”
Last month, DraftKings Inc. announced its intent to purchase Golden Nugget Online Gaming in an all-stock deal worth about $1.56 billion, giving DraftKings access to tap into Golden Nugget’s iGaming product and current database of more than five million customers.
DraftKings has also entered into a commercial agreement with Fertitta Entertainment, the parent company of the Houston Rockets, Golden Nuggets, LLC and Landry’s LLC. DraftKings will become the exclusive daily fantasy sports, sports gaming and iGaming arm of the Houston Rockets. DraftKings also plans to open a sportsbook at the Toyota Center, a move that is subject to state and regulatory authorizations. The merger is expected to close in the first quarter of 2022.
In March, DraftKings announced a collaboration with DISH Network to give DISH customers access to DraftKings’ fantasy sports experiences, such as initiating bets or entering DraftKings contests on their TVs, then watching the live sports events that pair with their bets or fantasy teams.