DraftKings (DKNG) - Get DraftKings Inc Class A Report received a one-month extension to the 'put up or shut up' deadline on its $22.4 billion approach for British bookmaker Entain Tuesday, sending shares of the sports betting group lower in early trading.
United U.K. takeover rules, DraftKings had until the close of London trading today to formalize its $22.4 billion bid for Entain, which operates the Coral and Ladbrokes betting shop and has a U.S. joint venture with MGM Resorts International (MGM) - Get MGM Resorts International Report, or walk away from the company for at least six months.
DraftKings now has until November 16 to make its formal and final approach for the London-based group.
"DraftKings will continue to engage in discussions between both companies and to conduct more substantive due diligence and analysis regarding its possible offer," the company said in a statement. "DraftKings further notes that while it progresses its discussions with Entain, it also continues to remain very focused on opportunities in the high growth North America market."
DraftKings shares on Tuesday closed 0.4% higher on the session at $48.84 following news of the extended bid deadline, after rising to as high as $50.23 earlier in the session. MGM shares closed 1.6% lower at $47.47.
MGM, which made an $11 billion approach for Entain earlier this year, has insisted its joint-venture prohibits DraftKings from accessing the London-based group's U.S. operations.
MGM said last month that it is 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 last month.
Entain told the London Stock Exchange last week that it September-quarter gaming revenues rose 4% from last year, and stuck to its forecast of full-year earnings in the range of £850 million to £900 million.