Entain PLC (LON:ENT) has confirmed that it has received but rebuffed proposal for a possible GBP8bn takeover offer from its partner in the US, MGM Resorts International (NYSE:MGM).
The owner of Paddy Power and Betfair, which recently changed its name from GVC Holdings, said MGM proposed offering 0.6 of its shares for each Entain share, which based on last closing prices would value the FTSE 100-listed bookmaker at 1,383p per share.
READ: Can name changes like GVC’s to Entain really help firms escape sins of the past?
Despite this being a premium of 22% to its share price, with Entain shareholders potentially owning approximately 41.5% of the enlarged MGM group, the board of the UK company said it has told the Las Vegas-based company that “it believes that the proposal significantly undervalues the company and its prospects”.
MGM, which has indicated it would offer a limited partial cash alternative to Entain shareholders, has also been asked to provide additional information about its strategic rationale for a combination of the two companies.
The move mirrors a similar takeover for Entain’s UK rival William Hill, which is being taken over by its Las Vegas-based partner Caesars Entertainment Inc (NASDAQ:CZR).