American online sportsbook operator DraftKings Incorporated has reportedly cancelled the cash-and-stock offer worth $20 billion that was to have seen it purchase London-listed iGaming and sportsbetting behemoth Entain.
According to a report from The Wall Street Journal newspaper, the Boston-headquartered firm lodged its initial takeover proposition in September and later agreed to extend the stalled talks in hopes of being able to finalize a deal in advance of a definitive November 16 deadline. However, the company purportedly detailed that it has now conclusively binned the proposition following lengthy negotiations with the leadership team at Entain.
Previously known as GVC Holdings until undergoing a late-2020 name change, Entain is responsible for a slew of online casino and sportsbetting domains including Ladbrokes.com, Bwin.com, Coral.co.uk and Sportingbet.com as well as the United Kingdom’s Ladbrokes and Coral-branded chains of high street bookmakers. The Isle of Man-based firm also purportedly inked an arrangement in August that will see it spend in the region of $69.1 million so as to acquire American eSports betting provider Unikrn Incorporated.
For its part and DraftKings Incorporated is a growing player in the embryonic sportsbetting market of the United States alongside rivals such as FanDuel Group and MGM Resorts International and is currently licensed to offer its mobile-friendly services to punters in eleven states including the important markets of New Jersey, Pennsylvania and Illinois. The Massachusetts-based company went public last year via a listing on the Nasdaq bourse before buying prominent iGaming technologies innovator SBTech Malta Limited and inking a definitive agreement to purchase smaller competitor Golden Nugget Online Gaming Incorporated.
The Wall Street Journal reported that the value of individual shares in DraftKings Incorporated immediately climbed by 7% on news of the cancellation, which indicated that investors were always sceptical about the prospects of the proposed amalgamation. The operator’s Chairman and Chief Executive Officer, Jason Robins, nevertheless purportedly asserted that he remains confident of future North American growth despite the Entain setback.
Joseph Greff from multinational investments specialist JPMorgan Chase and Company reportedly told the newspaper that the ultimate fate of the envisioned amalgamation was always uncertain owing to the large price and the complexities associated with integrating the two giant companies. He purportedly went further in disclosing that the drama has nonetheless helped Entain to increase the value of its own shares by around 41% since January’s failed $11 billion takeover attempt by MGM Resorts International despite experiencing a 6.3% slump yesterday.
Greff reportedly stated…
“We are not surprised by this outcome because we viewed this deal as just too complicated to close from the start.”