DAZN made an offer he couldn’t refuse
Entain, the parent company of partypoker, announced on Monday that chief executive officer Shay Segev is stepping down from his position. He will stay on for six months or until his replacement is hired before moving to sports streaming platform DAZN as its co-CEO.
It sounds like Segev’s decision is simply a matter of money. Entain’s chairman, Barry Gibson, said in a press release, “We are sorry that Shay has decided to leave us but recognise that we cannot match the rewards that he has been promised.”
Segev expressed his sadness over leaving after five years, but said DAZN offers him a “very different type of opportunity.”
Unrelated to MGM bid
The announcement comes just days after Entain rejected an $11.1 billion acquisition offer from MGM Resorts International. Segev said that it had nothing to do with his decision and that he agrees with Entain turning it down.
MGM offered 0.6 of its shares for each Entain share, valuing the company at 1,383 pence per share, a 22% premium over its closing price on December 31. Had Entain accepted the offer, it would have controlled 41.5% of the combined company. Entain believed MGM was undervaluing it, though it did not rule out considering a better offer.
It also wanted more information from MGM on why MGM wanted to merge. In its own press release, MGM obliged, laying out four bullet points:
• Deliver full control of the BetMGM business to leverage the rapidly growing U.S. iGaming and sports betting opportunity
• Position the Company as a global gaming company across both online and retail with a leading end-to-end technology stack
• Expand and diversify the Company’s operations, product offerings and earnings
• Position the combined Company for future growth and investment by leveraging its leading brands, leading technology platform and strong balance sheet
MGM wants BetMGM
In addition to partypoker, Entain owns a number of other top online gaming brands, including Ladbrokes, Coral, Partycasino, bwin, and sportingbet. As MGM is primarily a brick-and-mortar casino company, acquiring one of the world’s biggest players in online gambling – including poker, sports betting, and casino games – would be quite the diversification for MGM. MGM would also take ownership of Entain’s tried and tested software platforms.
One of the main goals for MGM, however, would be to take control, as it said, of BetMGM. BetMGM is a US-facing online sports betting joint venture between MGM and Entain, though it does also include online poker and casino. It was original founded as Roar Digital with BetMGM as its primary brand, but BetMGM has already become such a known quantity in the United States that the Roar Digital name has all but been supplanted.
With sports betting expanding quickly in the States, it appears that MGM wants to get its hands on the entire BetMGM venture. It is not likely just for the profitability, either. While the saying goes “two heads are better than one,” the other saying also goes “two many cooks spoil the broth.” While there is no indication of any problem between the two companies, MGM may just feel it would be easier to pull BetMGM completely under its roof.