DraftKings (DKNG) - Get DraftKings Inc. (DKNG) Report shares edged lower Wednesday after boosting its bid for British gaming giant Entain to around $22.4 billion and facing potential opposition from rival MGM Resorts International (MGM) - Get MGM Resorts International (MGM) Report.
DraftKings, which made an initial proposal of £25 per share fore Entain, which operates the Coral and Ladbrokes betting shops in the U.K. market that was quickly rejected, upped its bid to £28 per share, a level that is now more than double the $11 billion approach from MGM, Entain's U.S. joint-venture partner, earlier this year.
MGM said it's the "exclusive partner in the U.S. online sports betting and iGaming market", through its BetMGM joint-venture, adding that "any transaction whereby Entain or its affiliates would own a competing business in the U.S. would require MGM's consent."
"MGM will engage with Entain and DraftKings, as appropriate, to find a solution to the exclusivity arrangements which meets all parties' objectives," the group said in a statement late Tuesday.
Entain's London-listed shares surged 7.65% Wednesday to change hands at £24.32 each, and hit an all-time high of £25.00 each early in the session.
DraftKings shares, which fell 7.4% on Tuesday, were marked 1.2% lower in early trading Wednesday at $52.22 each. MGM shares jumped 3.7% to $41.97 each.
A takeover of Entain, which boasts a global network of online and retail gaming operations across 18 countries and five continents, would be a 'transformational' deal for Boston-based DraftKings, said Benchmark analyst Mike Hickey, citing the breadth of its operations and the value of its estimated $5.27 billion in 2021 revenues.
It could also see DraftKings challenge U.K. betting stalwart 888, which agreed to buy the non-U.S. assets of bookmaker William Hill from Caesars Entertainment (CZR) - Get Caesars Entertainment Corporation Report for around $3 billion.
William Hill, a familiar figure in British culture owing to its sports betting dominance in that market, has been operating U.S. sports books since 2012 and has operations in 13 states. It also has an existing 20% partnership with Caesars.
Last month, DraftKings reported a narrower-than-expected second-quarter loss and boosted its full-year profit guidance amid a rebound in online sports betting and interest in NFTs and other media that continues to draw users to its online platform.
DraftKings' July quarter revenues rose 320% from last year to $298 million, well ahead of Street forecasts, as monthly unique payers (MUPs) on its platform increased 281% to 1.1 million.