MGM has said it will not make a firm offer to buy the UK gambling company Entain, two weeks after its £8bn proposed takeover bid was rejected by the target’s board.
“After careful consideration and having reflected on the limited recent engagement between the respective companies regarding MGM’s rejected all stock proposal . . . [MGM] does not intend to submit a revised proposal,” the company said on Tuesday.
The share price of Entain, which owns the Ladbrokes and Coral chains in the UK, fell sharply on the news and was down 16 per cent in lunchtime trading in London.
MGM’s initial proposal, which followed several overtures in November, was rebuffed by the board of Entain, which argued that it “significantly undervalued” the business.
The news also follows the shock departure of Entain’s chief executive last week.
The two companies run a 50/50 joint venture together in the US to tap into the booming sports betting and online gaming market, which analysts estimate could reach annual revenues of $20bn or more by 2025.
Barry Diller, whose holding company IAC is MGM’s largest shareholder, told the Financial Times in an interview this month that he was “sceptical” that the deal could be done, but that MGM would be in a “leadership position whatever” in the online gaming market.
MGM said in Tuesday’s statement that it was still “committed to being a premier global omnichannel gaming and entertainment company, and will maintain a disciplined framework while evaluating a range of compelling strategic opportunities.”