PartyPoker's shares rose after Entain’s refusal to sell it to MGM Resorts
Recently, PartyPoker owners carried out rebranding, after which GVC Holdings became known as Entain.
However, in addition to the name change, there are also changes within the company. It is possible that against the backdrop of these events, another well-known gambling company MGM Resorts has offered to buy out PartyPoker shares.
MGM Resorts International proposed 0.6 of its shares for each Entain share for a total amount of over $11 billion. If the deal went through, Entain would own about 40% of all MGM Resorts shares.
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However, Entain representatives rejected this offer, citing "the undervaluation of their assets". They also asked MGM Resorts for additional information regarding the strategic rationale for the merger of two companies.
MGM Resorts provided additional arguments of their proposal, stating that the merger of companies will help to expand and diversify their activities and give opportunity to take the lead not only on the Internet, but also on the offline gambling market.
Refusal on the part of Entain can also be explained by the fact that there are mainly live-format gambling establishments among MGM Resorts assets (Bellagio, Mandalay Bay and MGM Grand). Given the situation with pandemic, many of their casinos suffer significant losses. After Entain's refusal to sell its shares MGM Resorts, their shares rose by more than 30%. It can also lead to a chain reaction and shares’ increase for Entain partners.