On Monday, DraftKings (NASDAQ:DKNG) proclaimed it’s purchasing Tilman Fertitta’s Golden Nugget Online Gaming (NASDAQ:GNOG) for $1.56 1000000000 in stock. At to the lowest degree i psychoanalyst says that’s just the commencement of more mergers and acquisitions activity in the iGaming and regulated sports wagering industries.
In a promissory note to clients today, Oppenheimer psychoanalyst Jed Emmett Kelly says consolidation in the cyberspace casinos and sports betting spaces is just getting started. He rates DraftKings “outperform” with an $80 cost target, implying upside of 56 percent from the Monday close.
For its part, DraftKings is proving to be an acquisitive company. The purchase of Golden Nugget Online is scheduled to close-fitting inward the first of all quarter of 2022.
This is the operator’s tertiary announced acquisition o'er the yesteryear several months, and that doesn’t include stakes taken inwards other firms or young business concern ventures. In tardily March, the operator proclaimed the purchase of Vegas Sports Information Network (VSiN), and that was followed upward a week later with the acquisition of Blue Ribbon Software, a provider of worldwide jackpot and gamification services for expend with jackpot promotions.
Analysts are mostly enthusiastic almost the DraftKings/GNOG marriage, noting the suitor is paying favourable terms due to the target’s slumping shares. Not only are straightaway revenue efficiencies potential because of the deal, but also that GNOG brings 5.5 billion customers to the tabularise that testament live structured into the DraftKings database. Most GNOG clients are casino number one players, meaning DraftKings will feature opportunities to sell them on sports betting or daily fantasize sports (DFS).
fuboTV, Benjamin Rush Street Interactive Possible Targets
As Oppenheimer’s Princess Grace of Monaco points out, tidings of the DraftKings/GNOG spousal relationship comes just fin days after Penn National Gaming (NASDAQ:PENN) said it’s buying Score Media and Gaming (NASDAQ:SCR) for $2 one thousand million inward cash and stock.
With the rate of dealmaking inwards the online casinos and sports betting industries brisken this month, investors are pondering what companies could be next to live taken out. Weary Willie offers upwardly two names as potential takeover targets: fuboTV (NYSE:FUBO) and Rush Street Interactive (NYSE:RSI).
fuboTV is a sports-heavy streaming provider angling to bolster up its sports wagering footmark and leveraging its weapons platform to get a player inward the in-game betting market. With a securities industry capitalisation of $3.94 billion, the keep company would be easily digestible for any keep down of suitors, and speculation surfaced before this year that DraftKings could wee-wee a streaming acquisition. But that’s just now a bruit at this point.
As for Benjamin Rush Street Interactive, that fellowship is perhaps the to the highest degree unmediated competitor to GNOG, and the companies’ trajectories are remarkably similar. Both went public belatedly lastly twelvemonth followers mergers with special aim acquisition companies (SPACs) and both stocks slumped. RSI, yet with the do good of a rally on the dorsum of the GNOG takeover news, is off 52 percent from its highs. Its $2.74 one thousand million market place economic value is approachable for an regalia of potential suitors.
Big Deals Possible, Too
Obviously, DraftKings’ purchase of GNOG doesn’t qualify as “large,” and the same would likely live true up of a takeover of RSI. However, it’s possible the manufacture and investors could live treated to a major takeover before the death of the year.
Rumors proceed swirling that MGM Resorts International (NYSE:MGM) will make up another run at its BetMGM partner Entain Plc (OTC:GMVHY). MGM saw its $11.06 1000000000000 tender for the British people bookie turned back up in January.
However, the Bellagio manipulator had $9.87 1000000000 inward liquidity at the last of the endorse quarter — a figure non including proceeds from the late announced sales of Aria and Vdara, and the company’s wager in MGM Growth Properties (NYSE:MGP). With a massive state of war chest and BetMGM, by the parent company’s estimate, now the second-largest online sports betting platform inward the US, MGM may be compelled to wee another offer for Entain.