Ladbrokes owner Entain confirms DraftKings offer

Entain Plc on Tuesday confirmed that U.S. fantasy sports betting company DraftKings has made an offer to buy the British gambling firm in a deal that one media report said could be valued at $20 billion.

Ticker	Security	Last	Change	Change %
GMVHY	ENTAIN PLC	9.3	-0.08	-0.85%
DKNG	DRAFTKINGS INC.	39.84	-1.30	-3.16%

London-listed Entain's shares surged about 19% as it confirmed the offer, which will give the U.S. company access to Ladbrokes Poker and bwin online betting. Shares of DraftKings fell more than 6%.

The offer price is roughly 2,500 pence per share, according to CNBC's David Faber, representing a premium of about 30%. The deal will be largely in DraftKings stock along with a cash component, Faber added.

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The deal frenzy comes as U.S.-based companies look to expand overseas and seek to tap the expertise of London-based firms as the United States opens up to sports betting.

Demand for online betting also boomed during the pandemic as customers took to playing from home when casinos and betting shops were off-limits.

Entain, which also owns brands such as Coral, PartyPoker and Sportingbet, had in January rejected an $11 billion offer from U.S.-based MGM Resorts International, saying it undervalued the company.

Ticker	Security	Last	Change	Change %
MGM	MGM RESORTS INTERNATIONAL	37.27	-0.25	-0.67%

In a successful transatlantic deal, Caesars Entertainment acquired Britain's William Hill in a 2.9 billion pound deal earlier this year.

DraftKings, which allows users to enter daily and weekly fantasy sports-related contests, submitted an offer a few days ago, Faber said, adding that the cash-and-stock mix was unclear.

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Entain said DraftKings must announce a firm intention to make an offer for the company or announce that it does not intend to make an offer by Oct. 19.

DraftKings was not immediately available for comment.