MGM Resorts International is walking away from an attempt to buy the owner of British gambling brand Ladbrokes after its $11 billion bid was rejected.
The US casino group said in a statement Tuesday that it would not make a firm offer for Ladbrokes owner Entain, following “careful consideration” and “limited recent engagement.”
MGM (MGM) made a £8.1 billion ($11 billion) takeover proposal earlier this month, seeking to capitalize on a surge in online betting during the pandemic. But Entain said the offer “significantly” undervalued the company’s shares and its prospects.
Shares in Entain surged 25% after the MGM offer was disclosed, indicating that investors believed a higher offer was coming, either from MGM or another competitor. Following the announcement on Tuesday, Entain’s stock plunged 15% in London. MGM’s shares rose 2.6%.
MGM, a major player in Las Vegas, said it remains committed to BetMGM, its existing joint venture with Entain. BetMGM, a sports betting and online gaming company, operates in more than a dozen US states.
“We remain committed to working with Entain to ensure its strong momentum continues as it expects to be operational in 20 states by the end of 2021,” MGM CEO Bill Hornbuckle said in a statement.
Entain echoed that sentiment in a regulatory filing while touting its credentials.
“Entain has a clear growth and sustainability strategy, backed by leading technology, that it is confident will deliver significant value for stakeholders,” the company said.
The British company’s next steps will have to involve hunting for new leadership, with CEO Shay Segev stepping down later this year. The announcement that he would leave Entain to lead a sports streaming platform was made just days after the MGM bid was rejected.