Make no mistake about it, had the proposed takeover bid from MGM Resorts for Entain been accepted it would have been an absolute landmark moment for the industry.
For context, MGM Resorts International – which generated income of more than $12 billion from its casino properties in the last uninterrupted year of 2019, would have acquired the rights to Entain, an iGaming behemoth worth more than £8 billion (according to their shareholders) and who is certainly an online leader in many jurisdictions around the world.
Together, and allied to their BetMGM venture, the duo would have yielded extraordinary power….alas, the bid was rejected and MGM have decided to wash their hands of the whole thing.
Of course, this is not the first time that a major takeover bid or potential merger has been mooted in an industry where the power grab is alive and well.
Indeed, if some of these possible link-ups had come to fruition the iGaming sector could have a very different look and feel today.
William Hill, Rank & 888 Holdings
What a gigantic hook-up this would have been.
The Rank Group and 888 Holdings joined forces in 2016 to try and takeover beleaguered William Hill, with reports suggesting that two separate bids – both in excess of £3 billion – were made for the UK firm.
However, both were rejected, with Hills determined to maintain their independence. A spokesperson for 888 commented that they were unable to ‘meaningfully engage’ with any of the betting brand’s major shareholders.
The two bids, believed to be worth 339p and 352p a share respectively, were labelled ‘highly opportunistic’ by a William Hill source, and the proposed merger was taken off the table shortly thereafter.
If the deal had gone ahead, it would – according to 888 and Rank – have created ‘the largest multi-channel gambling operator’ in the UK, and delivered cost savings to the tune of £100 million.
William Hill & The Stars Group
Get used to seeing the name William Hill, as they are a popular target for mergers and acquisitions.
In 2016 they were the target of multiple takeovers, and Amaya – the company that would go on to become PokerStars and thus the Stars Group – were also at the head of the queue.
They slapped a proposal for a merger on the table said to be worth £4.5 billion, with the aim of creating ‘a clear international leader across online sports betting, poker and casino.’
However, when Hills representatives sat down with their key shareholders, which includes the Parvus Asset Management fund, they were told the merger had ‘limited strategic logic’ and would depreciate the value of the firm’s shares. The plug was subsequently pulled on the deal.
Afterwards, Amaya claimed that remaining independent was the ‘best move’ strategically….before promptly going out and acquiring a rival UK firm, SkyBet, for £3.4 billion.
Entain & Enlabs
This one still has legs, and so perhaps this ultimately won’t be filed under the ‘failed’ category.
Having earmarked Enlabs as a leader in the growing Balkan region, Entain wanted to pick themselves up a slice of the action at the same time that they subject to MGM’s desires.
They put a £250 million bid in for the online gaming consortium, and surprisingly to many that was rejected by a section of Enlabs’ shareholders – notably Alta Fox Capital Management, who have a 3.3% stake in the firm. They point blank refused to sell their shares to Entain for the £3.50 per share on the table.
That price, which Alta Fox claim ‘materially undervalued the company’, means that for now at least this merger/acquisition is on the rocks.
William Hill & Caesar’s Entertainment
Just when William Hill’s shareholders thought it was safe to go back in the water….
Three years after the vultures were last circling, another international suitor made Hills the object of their desire.
Caesar’s Entertainment, the US casino behemoth, opened discussions on a planned merger with William Hill in June 2019, with £6 quoted as the figure offered.
But the deal fell through as Caesar’s struggled to report positive sales and earnings at its Las Vegas casinos, and that meant the two parties were set far apart in their respective valuations.
Well, what a difference a year can make. Just 15 months after that initial skirmish, it was announced that Caesar’s and William Hill had agreed terms on a £2.9 billion merger, with the casino operator taking over the ownership of the betting firm’s US retail estate.
As part of the deal, Caesar’s told William Hill they didn’t want their UK facing business….we await news on whether their high street betting shops will be sold or closed for good.