* Entain shares jump 8% to top of FTSE 100
* Gambling firm had rebuffed takeover bid from MGM
* MGM expects to have fresh cash after asset sale
(Adds background, Entain, MGM decline comment)
By Chris Peters and Yadarisa Shabong
Aug 4 (Reuters) - Shares of Entain, which rejected a
takeover offer from MGM Resorts this year, jumped to a
record high on Wednesday after a $4.4 billion asset sale by the
U.S. casino group prompted bets of a renewed bid for the British
bookmaker.
Entain, which owns the Ladbrokes and Coral brands, knocked
back a $11 billion offer from MGM in January as too low. But
some investors expect that MGM's sale of its stake in MGM Growth
Properties will give it fresh cash that could spur MGM
to make another bid for Entain, analysts said.
"Investors have been debating the likelihood of MGM
returning with an improved bid for ENT since its first
unsuccessful bid," Davy analyst Michael Mitchell said via email.
"The market believes (MGM's) strengthened balance sheet,
following today's news, has increased the possibility of the
same."
MGM said in its announcement on Wednesday that the stake
sale would give it "$11.6 billion of domestic operations
liquidity available to enable execution of its goals of becoming
the premier gaming entertainment company".
American gambling firms had been tapping into the expertise
of British rivals in the past year as sports betting has taken
off in the United States during the coronavirus crisis and
following a landmark ruling in 2018, which legalised such bets.
William Hill was taken over by Caesars Entertainment while
Gamesys agreed in March to a possible takeover by
Bally's Corp.
When it dropped plans to bid for Entain in January, MGM said
it would not submit a revised offer. Under UK takeover rules,
the U.S. firm was precluded from bidding for Entain for six
months after walking away. The six-month window expired on July
19.
Entain, previously known as GVC, and MGM declined to
comment.
The companies continue to collaborate on their 50/50 BetMGM
joint venture in the United States.
Entain's shares rose 8% to an all-time peak and were the top
gainer on the FTSE 100 index, while other British
gambling companies Flutter and 888 Holdings
also rose between 3% and 5% after MGM's announcement.
(Reporting by Chris Peters and Yadarisa Shabong in Bengaluru;
Additional reporting by Joice Alves in London; Editing by Emelia
Sithole-Matarise and Mike Harrison)
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