{"id":29047,"date":"2021-01-04T06:41:44","date_gmt":"2021-01-04T14:41:44","guid":{"rendered":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/?p=29047"},"modified":"2023-09-14T14:03:42","modified_gmt":"2023-09-14T22:03:42","slug":"this-just-in-13","status":"publish","type":"post","link":"https:\/\/www.lasvegasadvisor.com\/blog\/this-just-in-13\/","title":{"rendered":"This just in …"},"content":{"rendered":"\n
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MGM Resorts International<\/strong> is all over the news today. It just made a play for BetMGM<\/strong> partner Entain<\/strong>. It’s offering a stock swap of six-tenths of a share of MGM for every share of Entain, a transaction that Credit Suisse<\/strong> analyst Ben Chaiken<\/strong> values at $11 billion. “Entain has informed MGM that it thinks the offer significantly undervalues the company and future growth,” Chaiken continues. He called the increased commitment by MGM to online sports betting and to i-gaming (a party to which MGM was late) a “clear positive” but adds that the proposed deal is “not particularly needle moving to MGM as part of the overall conglomerate. It sounds like Entain has asked MGM to come back to them with more robust rationale for the business combination, and presumably a higher offer.”<\/p>\n\n\n\n\n\n\n\n

JP Morgan<\/strong> analyst Joseph Greff<\/strong> was more upbeat, saying the deal “makes sense” as part of a larger picture. Not that MGM is offering Entain chump change. That $11 billion would be a 22% premium to Entain’s last closing price and would give shareholders 41.5% of MGM. Have Entain executives let success go to their heads? (Were I CEO Bill Hornbuckle<\/strong> I’d leave Entain dangling a while. He’s got until Feb. 21 to fatten the offer.) Greff says of BetMGM that it is “a fairly small business with significant and attractive growth.” He likes the idea of diversifying MGM away from its dependence on Macao<\/strong> and terrestrial U.S. casinos (see: Strip, Las Vegas<\/strong>). And by making it an all-stock transaction, Leo the Lion doesn’t balloon his leverage, which is already pretty high.<\/p>\n\n\n\n

Greff continues that “the same strategic rationale” as the Caesars Entertainment<\/strong> acquisition of William Hill<\/strong> is at play and that there’s just as much likelihood of a competing bid emerging. “We don\u2019t think MGM will look to sell parts of Entain\u2019s business … We also like that MGM is taking advantage of its recent equity price strength and valuation to acquire Entain. Overall, the deal, in theory and subject to whatever additional proposals MGM would make to Entrain [sic<\/em>], makes sense to us and positions MGM well for digital\/mobile gaming growth.” Whatever’s making Entain balk, it might include the fact that Caesars bought William Hill for 11X cash flow, while MGM’s offer is 9.6X. Still, we think Entain is missing out on a good thing.<\/p>\n","protected":false},"excerpt":{"rendered":"

MGM Resorts International is all over the news today. It just made a play for BetMGM partner Entain. It’s offering a stock swap of six-tenths of a share of MGM for every share of Entain, a transaction that Credit Suisse analyst Ben Chaiken values at $11 billion. “Entain has informed MGM that it thinks the […]<\/p>\n","protected":false},"author":83928,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[1728],"tags":[],"jetpack_publicize_connections":[],"jetpack_sharing_enabled":true,"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/www.lasvegasadvisor.com\/shop\/wp-json\/wp\/v2\/posts\/29047"}],"collection":[{"href":"https:\/\/www.lasvegasadvisor.com\/shop\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.lasvegasadvisor.com\/shop\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.lasvegasadvisor.com\/shop\/wp-json\/wp\/v2\/users\/83928"}],"replies":[{"embeddable":true,"href":"https:\/\/www.lasvegasadvisor.com\/shop\/wp-json\/wp\/v2\/comments?post=29047"}],"version-history":[{"count":0,"href":"https:\/\/www.lasvegasadvisor.com\/shop\/wp-json\/wp\/v2\/posts\/29047\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.lasvegasadvisor.com\/shop\/wp-json\/wp\/v2\/media?parent=29047"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.lasvegasadvisor.com\/shop\/wp-json\/wp\/v2\/categories?post=29047"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.lasvegasadvisor.com\/shop\/wp-json\/wp\/v2\/tags?post=29047"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}