Twin Takeover Bids In Play As Questions Arise Around Diller Buying Entain

Two of the biggest names in US gaming are the subject of major takeover discussions, with separate bids emerging for Caesars Entertainment and MGM Resorts.

Last week, billionaire investor Tilman Fertitta submitted a $17.6bn proposal to take Caesars private at $31 per share. Days later, MGM received an offer from Barry Diller’s People Incorporated, formerly IAC, valuing the company at approximately $18bn.

According to Macquarie analyst Chad Beynon, timing is a major factor behind the interest. “These stocks are trading at historical low levels. So, I think these investors, whether it’s IAC/People’s or Tilman Fertitta – they’re strategic operators, but I really just think they see value at these levels.

“They know that these businesses should not be impacted as much by AI. Travel and experiences continue to be something that people are bullish on for the next several years.”

Beynon also pointed to slower-than-expected US iGaming expansion as a factor weighing on valuations.

Investors See Long-Term Digital Potential

While land-based casinos remain a key attraction, much of the investment is driven by future digital growth.

“I would believe that that’s more of the thesis; buying a cheap stock that should grow when real money gaming penetration increases in the United States and globally,” Beynon added.

He believes the absence of major new iGaming states has limited growth expectations for operators in recent years. However, established companies can harness the market’s future expansion potential.

Caesars Deal Appears Closer To Completion

Of the two proposed transactions, Beynon believes the Caesars deal currently looks more likely to succeed. Macquarie initially expected Fertitta’s offer to be higher given management’s repeated comments that Caesars shares were undervalued.

Beynon noted that most investors do not expect competing offers to emerge before the company’s go-shop period expires on 11 July.

The MGM situation appears less certain. Shares have traded above the proposed $48.30 offer price, leading some investors to view the bid as an opening move. Financing is also a consideration, with People Incorporated currently pursuing control of 51% of the company.

Digital Assets Could Become Key Focus

Beyond the casino properties, analysts are closely watching what these transactions could mean for online gaming assets. Fertitta previously sold Golden Nugget Online Gaming to DraftKings, creating speculation that Caesars’ digital division could be monetised or separated under new ownership.

MGM presents an even more interesting scenario due to its relationship with BetMGM and joint venture partner Entain. “The big question is does this change the outlook to buying out the 50% stake of BetMGM or buying all of Entain?

“Most investors believe that for MGM to own all of Entain – the tricky thing is what’s going on with the UK right now with the tax scheme.”

Diller has previously supported MGM’s attempt to acquire Entain. But there are still questions over how BetMGM fits into any future ownership structure.

“What are they going to do if they gain control of this? Would they spin out the [BetMGM] business? Would they IPO it? IAC historically has been very good about spinning out businesses from the parent business.

“So, the fact that BetMGM is still part of MGM, that could be a catalyst if this deal gets done, that it could be spun out.”

News of Diller’s $18bn bid for MGM and Tilman Fertitta’s $17.6bn to take Caesar’s private have rocked the US iGaming industry. These two companies are considered giants and their takeovers could influence the industry’s trajectory. According to Macquarie analyst Chad Beynon, the investments are driven by future market potential despite the lack of new iGaming states.