Entain share price is up by more than 25% today, becoming the best-performer in the FTSE 100 at the start of the year. The shares are trading at 1,131p, valuing the bookmaker at more than £6.63 billion.
What happened: As we wrote earlier today, US-based MGM resorts announced that it would acquire Entain, formerly known as GVC Holdings in a deal valued at £11 billion. The news was first reported by the Wall Street Journal. If the deal goes through, it will make it the second-biggest acquisition of a UK-based company. This is after S&P Global announced a $44 billion deal to acquire IHS Markit.
Why this matters: MGM Holdings is an American company that owns casinos and hotels, an industry that has been affected by the pandemic. The company’s majority owner is IAC Holdings, a company that is controlled by Barry Diller.
Its decision to increase its offer for Entain comes as the company seeks to diversify its earnings. It is not alone. In recent months, Caesars Entertainment bought William Hill, a UK-based bookmaker. Also, Flutter Entertainment bought Fanduel, making it one of the biggest players in the United States.
In a statement, Entain said that the offer by MGM Resorts undervalued the company.
The 30-minute chart shows that Entain share price popped today after the news was revealed. It rose to an intraday high of 1,457, which is the highest it has been in years. The shares moved above the important resistance level of 1,176p, which was the highest level on December. Therefore, in the near term, we suspect that ENT share price will continue rising as investors price in a higher bid for the company.
