DraftKings Could Emerge in Thin Field of Bet365 Bidders
New reports indicate that Bet365 is evaluating a potentially game-changing deal, involving either a complete or partial sale or a U.S. initial public offering (IPO), though the number of reputable buyers is already seen as limited. Among various gaming firms, it might just be DraftKings (NASDAQ: DKNG) and nobody else.
To clarify, neither Bet365 nor DraftKings has addressed that rumor, and it remains uncertain whether the two parties have communicated. Reports emerged last week indicating that the Coates family, which oversees Bet365, has engaged in conversations with Wall Street banks regarding several options for the UK-based sportsbook behemoth. These options consist of a sale, enabling the family to profit from its stakes in the business, or possibly selling stock in New York.
According to The Sunday Times, other UK betting companies Entain and Flutter Entertainment (NYSE: FLUT), which owns FanDuel, are not expected to pursue a bid for Bet365 due to potential antitrust issues with regulators. Additionally, there is considerable overlap between the European operations of Bet365 and those of Entain and Flutter.
According to The Times, this might position DraftKings as the most sensible remaining contender from the gaming sector for Bet365.
DraftKings Possesses Assets to Compete for Bet365
Speculation suggests that should Bet365 decide to sell completely, CEO Denise Coates aims for a $12 billion valuation.
With a market capitalization of $17.12 billion at the end of US trading today, DraftKings, located in Boston, possesses the capability to bid for the British firm, although the proposal would probably consist largely of equity with a minor cash portion.
If a deal is made in that manner — though there's no certainty — it would probably position the Coates family as one of the biggest shareholders of DraftKings. There's a risk associated with that since insiders at the gaming firm often sell their shares, and the stock has decreased by 18.52% in the last year.
Regarding the chance of DraftKings making a bid for a UK company, there is history. In 2021, the operator proposed a $22.4 billion cash and equity offer for Entain, although some analysts think it was a strategic move aimed at increasing Entain's price to block MGM Resorts International (NYSE: MGM) from gaining complete control of BetMGM.
Private equity companies are logical choices as potential buyers for Bet365
According to Casino.org last week, due to their longstanding connections to the gaming sector, private equity companies Apollo Global Management and CVC Capital might be logical candidates for Bet365. The Times included Blackstone in that list, although none of those three have shown a public interest in buying the gaming firm.
All three asset management firms are viable potential purchasers since they can offer the Coates family more immediate cash than DraftKings probably could.
Moreover, private equity firms can provide the family with greater flexibility compared to a buyer focused solely on gaming. A private equity firm may fully purchase Bet365 or a portion of it while organizing for a US listing that would further benefit Denise Coates and her family.
