Entain extends “Put Up or Shut Up” deadline for DraftKings takeover offer

Entain has called on DraftKings to “Put Up or Shut Up” in its efforts to acquire the FTSE 100 operator in a new statement to the London Stock Exchange (LSE).

Entain said discussions were still ongoing between the two firms to explore the “merits and feasibility” of a potential deal, in which DraftKings would pay £28 per Entain share, consisting of £6.30 per share in cash and the rest in DraftKings Class A common stock.

DraftKings was originally supposed to make a concrete offer for Entain shareholders to consider by 5pm today (19 October).

However, Entain has now persuaded a City Code on Takeovers panel to extend the cut off date to 16 November as it demands further information from DraftKings about the future make-up of the combined company.

“The board has been in discussions with DraftKings in order to explore the merits and feasibility of a potential transaction reserving its position on the appropriateness of the value of the proposal,” Entain told the market.

“As part of this, the board will require a number of matters to be satisfactorily resolved that are fundamental to the structure and value of the proposal.”

These matters are significant and include a clarification from DraftKings about the total value creation for Entain shareholders, including a share of any potential synergies resulting from. the deal.

Entain is also seeking further clarification over the future of BetMGM, which has been the source of much speculation and a central sticking point since DraftKings’ interest became public.

Concerns include the terms for any proposed technology supply agreement to BetMGM and US JV partner MGM Resorts, which has pledged to vehemently defend its own commercial interests should DraftKings be successful in its bid for Entain.

MGM Resorts failed with its own takeover offer for Entain back in January after an £8.1bn bid was rejected.

In addition, Entain has requested that DraftKings provide information on the potential governance rights and value protection for the combined entity’s stake in BetMGM.

Crucially, Entain is also seeking guidance on the potential governance and management composition of the combined business.

As it stands, both companies boast heavyweight senior management teams led by Jette Nygaard-Andersen and Jason Robins respectively.

Finally, Entain wants assurances regarding the deliverability of the potential transaction, including anti-trust and regulatory clearance as any potential deal would knit together two of the biggest companies in global online gambling.

Entain’s board of directors reaffirmed its confidence in the business regardless of any future consolidation. The company this month reported its 23^rd consecutive quarter of double-digit online NGR growth.

“The board strongly believes in the future prospects of Entain, underpinned by its leading market positions, world-class management team and industry-leading proprietary technology,” Entain said.

“Entain’s management remains focused on executing its growth and sustainability strategy and on delivering the opportunities laid out in Entain’s capital markets event on 12 August to treble its TAM to $160bn.

“As a result, the board is confident in Entain’s ability to continue to deliver material value for its shareholders going forward.”

Entain said there can be no certainty that a firm offer will be made and that a further announcement will be made in due course.

The FTSE 100 operator’s LSE statement was published without the consent of DraftKings, which responded with its own statement in under an hour.

The US giant said: “DraftKings will continue to engage in discussions between both companies and to conduct more substantive due diligence and analysis regarding its possible offer.

“DraftKings looks forward to exploring potential benefits that could derive from this possible combination for its and Entain’s shareholders, including expansion into regulated and regulating markets, accelerated product growth and innovation in new and existing verticals.

“DraftKings further notes that while it progresses its discussions with Entain, it also continues to remain very focused on opportunities in the high growth North America market.”

Entain shares climbed by around 3% following the announcement, while DraftKings stock remained relatively flat.