Barry Diller, billionaire and chairman of IAC, MGM Resort’s largest shareholder, expressed his doubt regarding the ongoing deal with Entain. According to Diller’s statement for the Financial Times, he is skeptical that the US casino group will successfully take over UK gambling business Entain.
He said that “It would be great if MGM could do this with Entain but whether it happens or not, I am sceptical and if it doesn’t, I am sanguine. I am absolutely sure we will be in a leadership position whatever,”
Part of MGM’s proposal are shares that Entain rejected. In case the UK gambling company prefers a cash alternative, IAC is ready to back up the additional proposal by investing $1bn. Such a potential offer values owner of Ladbrokes and Coral brands at about £8bn.
Last year Entain rejected an offer of $10 billion. MGM’s latest attempt to take over UK gambling company was backed up with another proposal for $11 billion, which was rejected ones again. Entain explained that such an offer undervalues the company.
In the meantime, an important representative of one of the top Entain shareholders, Standart Life Aberdeen, Wes McCoy backed up the Entain’s board position on the deal by saying that they want to see “proper value for the fact that Entain is so strong digitally in all its jurisdictions”.
Barry Diller’s Media Empire
Barry Diller and his company IAC have a long history of buying and expanding online businesses. The company owns the brand Ask.com and The Daily Beast along with 30 more digital media brands.
MGM Resorts is yet another important investment for Diller’s IAC of about $1bn building a 12 per cent stake. The chairman himself stated that it is a golden opportunity “to own a meaningful piece of a pre-eminent brand in a large category with great potential to move online”.
He pointed out that there is a good logic behind combining MGM and Entain’s brand. A possible future partnership between the two companies would combine two powerful players in the gambling world that would provide online casino and sports betting experience to their customers. Diller even suggested that if another acquirer appears, there is a possible option for a joint venture. Such a suggestion was described by some as “a poison pill” for it makes Entain a less attractive target for other potential prospects.
The reason is that a joint venture would stop Entain from keeping its steady position on the US market, which, according to specialist, could roll out as the largest legal gambling market.
As a conclusion, Mr. Diller expressed his firm belief that whatever the outcome of the Entain deal, the opportunities in front of MGM are still a lot.
Source: “Barry Diller “skeptical” on chances of MGM-Entain deal success” , Financial Times, January 11, 2021