Entain faces the possibility of a new bid from partner MGM according to analysts at Citi, who suggest a second approach from the US group is “plausible.”
Before a bullish trading update from US joint venture BetMGM was published in the UK, the broker noted Entain’s shares have fallen post the STS acquisition and equity raise, sterling has weakened in recent days while MGM shares have strengthened.
Entain, which owns Betfair and Paddy Power, owns BetMGM through a 50/50 operation with MGM.
“We would expect a bid at a 50% premium to Entain’s current share price to involve a c.90% share component excluding an equity raise, or a c.60% share component including a c.US$3bn equity raise,” Citi said.
The broker pointed out MGM’s CEO said no “for now” to an Entain bid on February 8, meaning that position could be re-considered from August 8.
Entain shares rose by 4.2% to 1,354p.