MGM Resorts International on Friday said it has received a non-binding letter of intent from IAC/InterActiveCorp supporting the casino operator’s proposed purchase of Entain plc.
IAC has more than 59 million shares of MGM Resorts, making it the company’s largest shareholder.
Entain is MGM’s partner in the US sports betting and online gaming market.
MGM announced its bid for Entain on 4 January.
MGM has indicated that a partial cash alternative could be made available to Entain shareholders. In its letter, IAC said it would be willing to consider funding a portion of the partial cash alternative in an amount up to $1 billion.
In the letter, IAC said it considers the strategic rationale for MGM's proposed combination with Entain to be compelling, adding the combined company would be positioned as a “pure play omni-channel global leader in gaming and entertainment.”
“The future of gaming will be omni-channel, and the long-term winners in global gaming will deliver to customers compelling digital and physical experiences under one brand and loyalty program, and will leverage customer acquisition spend across a holistic consumer journey in gaming,” IAC said in its letter.
IAC said it expects the combination would accelerate the growth and market penetration of BetMGM in the US. IAC cited MGM’s asset base, combined with Entain’s complementary physical footprint in the UK and Europe, its technology platform and its digital presence in UK, Germany, Belgium, Italy, Brazil and other countries, “could expand the combined company's market opportunities by leveraging each company's local geographic and operational expertise in new markets.”
IAC has so far invested approximately $1 billion in MGM to accelerate MGM's penetration of the $450 billion global gaming market. IAC said in its letter of intent it “continues to strongly support this objective for MGM whether or not a transaction with Entain is consummated.”