Global Investment Bank Recommends Buy For Flutter & Entain As MGM Circles Again
Global banking firm CitiGroup are advising its clients to buy big into both online gambling companies Flutter Entertainment and Entain as US gambling especially in sports betting soars in activity.
Two years ago CitiGroup expected US online gambling to reach around $4.6 billion a year in earnings that has now doubled to a long term expectation of in excess of $9.3 billion. Those numbers have led one of the world’s leading banking firms and advisors on shares to recommend purchasing into both Flutter and Entain at the current share price.
Indeed with both companies far exceeding their expectations in how fast the US market is growing rumours continue on any US approach for either company.
MGM Resorts has only recently attempted to acquire Entain with multiple offers only to be told the valuation given by the US casino giant far undervalued the online company.
Also only late last year sports betting company DraftKings made an approach for Entain valuing the firm at £16.4 billion but MGM put the brakes on that as it has a 50/50 partnership with Entain in the expanding BetMGM product in the US.
The casino company refused to allow any deal that involved BetMGM and so DraftKings pulled out.
But with investment firms indicating strongly that both Flutter and Entain will only grown in value will 2022 see another move for both or either firms?
Speculation has it that MGM will come back this year with an improved offer for Entain, previously the casino company offered just £8 billion, that would now have to double for Entain to be interested given the valuation DraftKings gave on their offer.
If any company goes for Entain it would only be MGM with the complexity of the BetMGM brand creating difficulties for any other interested party. And with MGM selling off some assets such as the Mirage for $1 billion and in August 2021 selling MGM Growth Properties (MGP) for a total of $11.6 billion, it could be that MGM are filling their war chest for another attempt at Entain.
