DAVY VIEW

Given the scale of the emerging US opportunity, MGM’s interest in Entain is hardly surprising. It is the latest example of industry consolidation as major operators jostle to increase and optimise exposure to the exciting market. The strategic rationale for MGM is likely to be similar, especially given the less certain prospects for its traditional land-based model. That said, we believe the proposal undervalues the sum of the group’s operations, including its prospects in the US. MGM’s flexibility and ability to improve its offer will therefore be key.