* MGM does not intend to submit revised proposal
* Entain had earlier rejected $11 billion approach
* Look forward to working with MGM on JV -Entain
* Entain shares down nearly 12%
(Adds details on MGM's decision to end deal talks, adds share
prices, background)
By Tanishaa Nadkar
Jan 19 (Reuters) - Casino operator MGM Resorts International
on Tuesday ditched plans to buy Ladbrokes owner Entain
after the British company rejected an $11 billion
takeover approach this month, sending Entain's shares down
nearly 12%.
The United States is seen as the next big growth market for
sports betting, spawning a series of transatlantic partnerships
tapping in to European technology and expertise. These include
Caesars Entertainment agreeing last September to buy
William Hill in a 2.9 billion-pound deal.
MGM said it would not submit a revised proposal or make a
firm offer for Entain, which had said the approach announced two
weeks ago significantly undervalued its business.
Entain shares closed down 11.9% at around 12.44 pounds in
London. MGM shares were up 2.5% at $30.54 in New York trading
late on Tuesday afternoon.
"We look forward to continuing to work closely with MGM to
drive further success in the United States through the BetMGM
joint venture," Entain said in a statement.
Online betting firms have benefited during the COVID-19
pandemic-led lockdowns, as customers took to playing from home
when casinos and betting shops were off-limits.
MGM had previously said a merger with the British bookmaker
would be compelling and believed a deal would help expand
BetMGM, which the two have operated since 2018.
The proposal, on the basis of 0.6 MGM share for each Entain
share, was also backed by billionaire Barry Diller's IAC
. It valued Entain shares at 13.83 pence each when it was
first announced.
Complicating matters, Entain Chief Executive Officer Shay
Segev decided to step down just seven months into the role and
in the middle of negotiations with MGM to take a job with sports
streaming service DAZN.
Segev's departure, as well as limited engagement in talks
shown by Entain and a difference in price expectations between
the two sides, led MGM to decide to walk away from the deal,
according to a person familiar with the matter.
Entain, previously known as GVC, has itself expanded rapidly
through a series of acquisitions and owns the bwin, Coral and
Eurobet brands, operating traditional British high street
betting shops as well as offering online gambling.
"While we are genuinely surprised MGM didn't up its
consideration ... we don't think this changes MGM's ability to
secure equity value enhancing benefits from the attractively
growing US sports betting and iGaming pie," JP Morgan analysts
said.
The brokerage said it would not rule out further discussions
with Entain depending on how the company shareholders reacted,
adding it would be tough for someone else to buy Entain given so
much potential equity value coming from the 50/50 BetMGM joint
venture.
(Reporting by Tanishaa Nadkar in Bengaluru; Additional
reporting by Joshua Franklin in Miami
Editing by Keith Weir and Matthew Lewis)
