Entain received a cash-and-stock offer for 2,800 pence a share on Sept. 19, the company said in a statement Tuesday after the London stock market closed. The proposal, representing a 46% premium over Monday’s closing share price, includes 630 pence in cash.

Entain also disclosed that it had received an earlier offer from DraftKings of 2,500 pence a share, which the board rejected. Entain said it would “carefully consider” the latest offer, which may not lead to a deal. DraftKings confirmed in a separate statement that it made an offer but didn’t provide additional details.

The U.K. company’s shares jumped as much as 11% to 2,500 pence in early London trading on Wednesday, adding to an 18% gain the day before. DraftKings shares dropped 7.4% in New York on Tuesday.

Complications

While the offer price is “very attractive” for Entain shareholders, the deal is complicated by its relationship with MGM Resorts International, which co-owns its U.S. joint venture, BetMGM, said Gavin Kelleher, an analyst at Goodbody. The deal’s structure, which includes 630 pence per share in cash and most of the proposed payment in DraftKings shares, also makes it harder to evaluate the approach, he said. 

Casino operator MGM said Tuesday that any deal that results in a competing U.S. operation would be subject to its consent. The company said it would engage with Entain and DraftKings to find a solution.

“MGM’s priority is to ensure that BetMGM continues to capture the growing U.S. online opportunity and realizing MGM’s vision of becoming a premier global gaming entertainment company,” MGM said.

An acquisition would dramatically expand DraftKings’s emerging gambling empire, coming just over a month after the company agreed to buy Golden Nugget Online Gaming Inc. Entain, which owns British bookmakers Ladbrokes and Coral, earlier this year rejected an $11 billion takeover attempt from MGM, saying the bid undervalued the company during rising interest in online betting.

Deal Spree

The U.S. Supreme Court in 2018 allowed states outside of Nevada to offer sports betting, a move that sparked a spree of trans-Atlantic gambling deals and a land grab for customers. Casino operator Caesars Entertainment Inc. bought Britain’s William Hill in April, Ireland’s Flutter Entertainment Plc bought Stars Group Inc. in Canada last year, and Bally’s Corp. is in the process of buying Gamesys Group Plc.

The approach by DraftKings is the biggest test yet for Entain Chief Executive Officer Jette Nygaard-Andersen, who took the reins days after MGM’s unsuccessful offer in January. She has told investors that Entain would grow healthily thanks to improving technology and planned expansions in new markets.

DraftKings, which made its name in the daily fantasy-sports market, has sought to expand and capitalize as online gambling increasingly goes mainstream. The Golden Nugget deal is intended to help DraftKings attract more casino-type betting customers while establishing a partnership with Fertitta Entertainment Inc. DraftKings was also involved in talks about a sports-betting pact with ESPN, Dow Jones reported last month.

The volume of deals involving British companies has already more than doubled to $522 billion this year compared with the same period in 2020, according to data complied by Bloomberg, with several household names drawing overseas buyers. Bids are on the table for grocer Wm Morrison Supermarkets Plc, and defense firms Meggitt Plc and Ultra Electronics Holdings Plc.