The upcoming launch of the UK Playing Fee’s (UKGC) broadly anticipated white paper may stoke a contemporary spherical of consolidation exercise within the business. UK-based companies, together with behemoth Flutter Leisure (OTC: PDYPY), may very well be potential targets.
Caesars Palace Las Vegas. A analysis agency says the operator may make an acquisition supply for FanDuel, or its mum or dad, Flutter Leisure. (Picture: Caesars Leisure)
A brand new report by knowledge supplier CTFN signifies that business observers imagine share value draw back attributable to the whitepaper — which is believed to be popping out later this month — is already priced into UK-based gaming corporations. And with the regulatory framework unlikely to be as punitive as beforehand speculated, there’s optimism that companies reminiscent of Flutter may turn into takeover targets.
The analysis agency means that following the publication of the white paper, Caesars Leisure (NASDAQ: CZR) may buy FanDuel for a “hefty” premium or doubtlessly transfer on everything of Flutter Leisure. Flutter owns 95% of FanDuel– the biggest on-line sportsbook operator within the US.
Such a transaction would troublesome for Caesars to digest. FanDuel alone would seemingly command a price ticket double that of DraftKings’ (NASDAQ: DKNG) present market capitalization of $8.53 billion. Name it $17 billion, and Caesars, price $10.88 billion, must seemingly promote belongings, debt, and maybe fairness to afford FanDuel. That will run counter to the on line casino big’s efforts to cut back its debt burden. Plus, there’s the matter of Boyd Gaming’s (NYSE: BYD) 5% stake in FanDuel, how prepared that firm is to half with it, and the way open Caesars is to paying a premium to a direct rival for it.
As for buying Flutter outright, that doesn’t appear believable for Caesars as a result of the Paddy Energy proprietor’s market worth is almost $30 billion, and its assortment of worldwide belongings will not be engaging to a gaming firm that’s intensely centered on the US, as is the case with the Harrah’s operator.
MGM Might Revisit Entain Bid, Too
In a January word, CTFN noticed that the discharge of the white paper may compel MGM Resorts Worldwide (NYSE: MGM) to revisit a takeover of Entain Plc (OTC: GMVHY).
Only a few weeks later, MGM CEO Invoice Hornbuckle mentioned his firm wouldn’t be trying to purchase its accomplice within the BetMGM enterprise. Nonetheless, CTFN means that the brand new steering from the UKGC may “materially” change Entain’s outlook, doubtlessly bringing MGM again to the bargaining desk.
It’s believed that MGM may very well be a suitor as iGaming and sports activities betting consolidation intensifies. Nonetheless, the standard knowledge is that the on line casino operator would purchase Entain out of BetMGM — not purchase the Ladbrokes proprietor outright.
Ought to one other suitor name for Entain, MGM must approve that deal, notably if the customer has US operations competing with BetMGM.
888 Holdings Might Be Goal, Too
CTFN added that 888 Holdings (OTC: EIHDF) is also a takeover goal, although the analysis agency doesn’t point out potential suitors.
888 shares are presently depressed in anticipation of the white paper and due to the latest departure of former CEO Itai Pazner amid an inner anti-money laundering probe.
The corporate has beforehand been talked about as an acquisition candidate. However its scant US footprint may restrict the pool of potential consumers. Caesars is unlikely to be a part of that group. That’s as a result of in 2022, it offered William Hill’s worldwide enterprise to 888.
