DraftKings Contemplated Takeover of 888 Holdings
Date: 2023-11-09 Author: Dima Zakharov Categories: SPORTS BETTING, EVENTS
DraftKings' Takeover Consideration
American sports betting juggernaut DraftKings was reportedly exploring the possibility of acquiring 888 Holdings, a move that could have far-reaching consequences for the gambling industry. Although DraftKings has not yet officially proposed a takeover, they have engaged in preliminary discussions with 888 Holdings shareholders.
In a report by the Financial Times, it was revealed that DraftKings had been mulling over the idea of a takeover during the summer. Their discussions regarding the acquisition were in the early stages, hinting at the seriousness of their consideration.
CEO's Involvement and All-Stock Offer
During the months of June and July, Jason Robins, the CEO of DraftKings, held talks with representatives of FS Gaming, a major shareholder of 888 Holdings. The discussions centered around the possibility of an all-stock takeover of 888 Holdings, indicating DraftKings' interest in pursuing this avenue.
These conversations coincided with a period when 888 Holdings was actively searching for a new CEO. Per Widerström, who had held several NED positions, ultimately assumed this role, dedicating all his time to the company.
888 Holdings: A Tempting Takeover Target
Financial experts have identified 888 Holdings as a prime candidate for takeover, citing the company's numerous challenges. These include a declining share price, management issues, business difficulties, regulatory complications, and a license review.
Based on the market capitalization of 888 Holdings at that time, DraftKings could have theoretically acquired the company for approximately $676.9 million. However, the significant outstanding net debt of 888 Holdings might have posed a stumbling block, particularly given their recent acquisition of the British gambling giant William Hill from Caesars Entertainment.
DraftKings' Expansion Strategy
DraftKings' contemplation of a takeover aligns with the company's overarching strategy for expansion. While the deal was not confirmed, DraftKings remains a key player in the world of sports betting and iGaming.
DraftKings' Strong Q3 Performance
In the meantime, DraftKings has released its financial results for the third quarter of 2023, indicating robust performance. The company achieved a revenue of $790 million during this period, reflecting the success of its business strategy.
The positive Q3 results have prompted DraftKings to revise its full-year 2023 revenue guidance, now expecting it to fall within the range of $4.5-4.8 billion. This revision is a testament to the company's strong momentum in the industry.
The success can be attributed to DraftKings' expansion into new markets and jurisdictions. Their recent launch in Maine was particularly noteworthy, as it witnessed an exceptional start during the first weekend of regulated sports betting in the state. DraftKings continues to be a prominent player in the sports betting landscape.
