US casino giant MGM Resorts has walked away from an £8 billion takeover of Ladbrokes owner Entain after its approach was rejected.
Shares in the FTSE 100 gambling firm – formerly called GVC – plunged as much as 20% on Tuesday after MGM ditched its plans.
Las Vegas-based MGM said it would not increase its approach or make a firm offer for Entain “after careful consideration and having reflected on the limited recent engagement between the respective companies regarding MGM’s rejected all stock proposal”.
It comes a week after Entain chief executive Shay Segev announced his shock departure after less than six months in the role and amid the bid battle.
Entain – which also owns brands including Coral, Foxy Bingo and Sportingbet – rebuffed MGM’s £8.09 billion proposal earlier this month, saying it “significantly undervalues the company and its prospects”.
MGM had until February 1 to make a formal bid or walk away.
Under the approach, Entain investors would have received 0.6 shares for each share they own – representing a value of 1,383p per share – up 22% on the company’s closing price on December 31 2020.
It would have left Entain shareholders owning 41.5% of MGM.
Following MGM’s decision, Entain gave assurances that it has a “clear growth and sustainability strategy, backed by leading technology, that it is confident will deliver significant value for stakeholders”.
It will continue to “work closely” with MGM in the US on their BetMGM joint venture, Entain added.
Entain will give a trading update on January 21.