* DraftKings must decide by Nov. 16 on formal buyout offer
* Entain says talks on management, plans for BetMGM ongoing
* DraftKings says it will continue to engage with Entain
(Writes through with deadline extension, adds Breakingviews
link)
Oct 19 (Reuters) - DraftKings has another month to
decide on a formal offer for Entain as the betting firms
continue talks on the details of a possible deal, including the
U.S. company's plans for Entain's BetMGM venture with MGM
.
Entain said on Tuesday it had sought the extension from
Britain's takeover regulator since the discussions were still
ongoing. Talking points with DraftKings also included management
composition and antitrust clearances, it added.
DraftKings put forward its $22.4 billion buyout proposal
last month after Entain rejected a bid roughly half the size
from partner MGM earlier this year. DraftKings had until Oct. 19
to make a firm offer for Entain or walk away.
Shares of London-listed Entain, which hit a record high on
DraftKings' proposal, have been bolstered by speculation that
MGM could return with another offer for the owner of
Ladbrokes and Coral betting shops.
If DraftKings does make a formal offer for Entain by the new
Nov. 16 deadline, it could potentially kick off a
$22-billion-plus bid battle for the British gambling firm.
The stock closed 2.2% higher at 2,171 pence on Tuesday.
"The board will require a number of matters to be
satisfactorily resolved that are fundamental to the structure
and value of the proposal," Entain said.
MGM has said any deal that would make Entain a competitor in
the United States would require its consent.
JPMorgan analysts have said DraftKings may have to sell
Entain's 50% stake in the BetMGM joint venture to MGM to get
consent from the U.S. casino operator.
DraftKings said it was continuing its talks with Entain and
conducting more due diligence, while also indicating it was open
to other deals.
"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," the company said.
Dealmaking in the online gaming industry has been picking up
as the United States opens up to sports betting, and players
look to build scale and tap the expertise of foreign companies
in more developed markets, such as Britain.
Takeover battles for British companies have also heated up
in recent years as Brexit and the COVID-19 pandemic hammered
valuations, and a number of deals have received takeover
deadline extensions.
A bid battle for supermarket group Morrisons ended up in an
auction.
(Reporting by Muvija M, Chris Peters and Pushkala Aripaka in
Bengaluru; Editing by Mark Potter and Jan Harvey)
