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Entain’s silence on DraftKings takeover approach is puzzling
Investors hoping that Ladbrokes and Coral owner Entain (ENT) would provide an updated response to September’s unsolicited takeover approach from US fantasy sports company DraftKings at its third quarter trading update on 12 October were sorely disappointed.
If Entain’s management wanted the numbers and continuing trading momentum to speak for themselves, they showed a strong hand, delivering a 23rd consecutive quarter of double-digit online growth, taking year-to-date growth to 21%.
Meanwhile US joint venture partner BetMGM continued to take market share and is now challenging for the number one position while in i-gaming it is the clear market leader.
Shore Capital believes the better than expected trading performance underpins Entain’s target to deliver $1 billion of US net gaming revenues in 2022.
But it’s not just about delivering progress in the US; Entain has ambitions to become the leading player in regulated gambling jurisdictions worldwide as well as entering adjacent markets to exploit the convergence of the media, entertainment and gaming industries.
The wider ambition sees the company’s total addressable market tripling to over $160 billion.
Dangling impressive growth targets in front of investors might convince them to stay on board for the ride and means DraftKings might have to make a far superior offer than the £28 per share deal put forward, if it is to get enough shareholder support for the takeover.