DraftKings walks away from $22.4B bid to acquire Entain despite extended deadline

DraftKings has decided not to make a firm offer for Entain, the sports betting operator confirmed on Tuesday. In a new statement Tuesday, the company said it decided not to pursue a takeover “following further analysis and discussions” with Entain’s board of directors.

“After several discussions with Entain leadership, DraftKings has decided that it will not make a firm offer for Entain at this time,” said Jason Robins, DraftKings CEO, Co-Founder and Chairman of the Board.

The sports betting giant considers that, given its current capabilities and technology, it is still set to maintain “a leadership position” and achieve its long-term growth plans in the growing North American market without having to secure the deal.

The Boston-based betting firm’s intentions of buying British gambling company Entain, which owns the Ladbrokes and Coral brands, was first made public late last month. The buyout proposal was for a total $22.4 billion.

DraftKings shares have now surged 7% in premarket trading in New York, while Entain shares fell 11% on the London Stock Exchange. The day is on track to be their worst since January, reports Reuters.

DraftKings decided to pass on the takeover proposal despite the UK's takeover regulator having agreed to Entain’s request to extend the deadline for a bid to be presented. DraftKings had time until November 16 to bid. It previously had until October 19 to make a firm offer for the company or else walk away. 

The US operator put forward its $22.4 billion buyout proposal in September after Entain rejected a bid half the size from partner MGM earlier this year. Any deal that would have made Entain an MGM competitor in the United States would have required MGM’s consent.

American gambling companies have been targeting European operators these last months in an effort to exploit the US’ expanding sports betting market. In April, Caesars Entertainment announced the completion of a $4 billion acquisition of William Hill. More recently, Caesars agreed to sell Hill’s non-US assets in a $3 billion deal.