PENN and Flutter stocks spike following acquisition reports
Operators see market react positively after The Deal suggests Flutter could partner with Boyd Gaming in a move for the firm behind ESPN Bet
PENN Entertainment’s stock jumped 5% on Friday, July 5 after reports emerged Flutter could partner with Boyd Gaming in a two-pronged approach for the business.
As per The Deal, Flutter and Boyd could partner, with the former taking on PENN’s digital arm and Boyd assuming control of the operator’s land-based casino empire.
Flutter and Boyd have a long-standing relationship, with Boyd holding a 5% stake in Flutter’s FanDuel.
The reports suggested Flutter would be interested in buying back that stake as part of any buyout of PENN.
It was suggested that stake could be worth as much as $1bn, with Flutter then using those funds to pay for PENN Interactive, and within it, ESPN Bet and Hollywood Casino.
The speculation comes after Reuters previously reported Boyd was interested in acquiring PENN Entertainment on its own.
At the time, PENN’s stock soared 10%.
Having opened at $18.69 on Friday morning, PENN’s stock peaked at $20.48 today, July 8, before moving back towards the $20 mark.
Flutter’s US stocks are sitting at $197.38, up from a Friday close of $195.12. Boyd Gaming’s share price has remained flat.
PENN Entertainment’s future has been in question after two activist investors, HG Vora and the Donerail Group, made their frustrations known this year.
In the case of the Donerail Group, managing partner Will Wyatt took aim at the lack of progress made with both the online and bricks-and-mortar operations.
Wyatt’s letter also took aim at PENN’s M&A strategy, which included buying theScore for more than $2bn and ploughing almost $450m across two tranches to acquire Barstool Sports.