Ladbrokes owner Entain receives bid from MGM Resorts

US casino giant MGM Resorts has made an $11bn (£8.1bn) offer for British gaming company Entain, which owns Ladbrokes.

The move is the latest attempt by a casino operator to move into the online gambling business.

In addition to its chain of High Street betting shops, UK-based Entain also owns a number of online sports betting and gambling sites.

Entain confirmed the offer, first reported by the Wall Street Journal, but said the price was too low.

Entain had recently rebuffed an earlier $10bn (£7.3bn) all-cash offer from MGM, the newspaper said.

Along with Ladbrokes, FTSE 100-listed Entain also owns sports-betting site Bwin and online gaming group Partypoker.

It describes itself as “one of the world’s largest sports betting and gaming groups operating in the online and retail sector.”

Last month, Entain renamed itself from GVC Holdings. Other brands the $9bn group owns include Coral, Eurobet, Gala and Foxy Bingo.

The new bid for Entain comes with financial backing from MGM’s largest shareholder, InterActiveCorp (IAC), which took a 12% stake in MGM Resorts last August.

At the time, IAC’s chief executive Barry Diller said it planned to work with MGM to expand its online gambling portfolio.

Covid headwinds

The attempted acquisition comes as the casino industry faces headwinds from the Covid-19 pandemic.

Bricks-and-mortar casino operators have struggled under travel restrictions.

The economy of Asian casino hub Macau shrank 49% in the first quarter of this year, while unemployment in Las Vegas reached 30% earlier in the year and remains well above the US average.

MGM Resorts, which is the operator of the Bellagio casino in Las Vegas, laid off 18,000 furloughed employees in the US in August.

Many online gambling companies, by contrast, saw a boost during Covid-19 restrictions, prompting many casino owners to pivot their businesses towards online.

Last September, MGM rival Caesars Entertainment struck a $3.7bn deal to buy UK-based William Hill.