Entain, formerly GVC, has stated that a £8.1bn takeover bid from US casino operator MGM Resorts “significantly undervalues” the company and its assets.
Though the Ladbrokes Coral operator saw shares jump 28 percent following the announcement, it has asked MGM for further clarification of its intentions.
“The Board of Entain has stated it believes the proposal undervalues Entain but has also asked MGM to provide additional information in respect of the strategic rationale for a combination of the two companies,” said a statement from the company.
In response, MGM stood by the “compelling” proposal, but also provided detail as to the benefits of the deal for the British bookie.
These include delivering full control of the BetMGM business in order to capitalise on US sports betting growth, consolidating Entain’s position as a global gaming company across both online and retail, and expanding and diversifying the Company’s operations.
MGM also confirmed that it has proposed an offer of 0.6 MGM shares per Entain share, representing a 22 percent premium on Entain’s stock value, when measured on 31 December’s closing price.
However, the operator added there is no certainty that any offer will be made for Entain, stating the firm “does not intend to comment further on this or other rumors or speculation.”