It has been four years since MGM Resorts International (NYSE: MGM) proposed to purchase BetMGM partner Entain Plc (OTC:GMVHY). One analyst thinks it’s feasible that the casino giant might reconsider such a proposal this year. 

In a recent, more extensive report on gaming stocks, Macquarie analyst Chad Beynon noted that MGM might contemplate another bid for Entain. The two firms are equal partners in BetMGM, and the casino operator based in Las Vegas has consistently expressed its desire to have complete control over the online gaming company.

"While the company attempted to acquire its joint venture partner in Entain in 2021, we believe likelihood could increase given management transition, current share price (Entain shares are -36% over the last year, market cap of ~$4.8bn), and potential synergies,” observes Beynon.

Considering the decline in Entain's stock price and its previously mentioned market valuation, it’s feasible that MGM might cut its 2021 proposal of $11.06 billion and still persuade the owner of Ladbrokes to engage in negotiations. Four years ago, the British bookmaker stated the offer is insufficient. 

What MGM Truly Desires From Entain 

The previously mentioned takeover offer made by MGM was aimed at acquiring all of Entain, yet analysts and investors largely think that the casino company merely seeks the 50% of BetMGM that it does not currently possess. 

If that's the case, MGM might propose to buy that share, which would be less expensive than completely acquiring Entain. In October 2023, ex-Entain CEO Jette Nygaard-Andersen stated that joint ventures aren't permanent, suggesting that the company might be open to selling its BetMGM stake if the offer is favorable. 

In a thorough analysis of MGM shares, which he labeled a value opportunity, Macquarie's Beynon identified six possible catalysts for the stock in 2025—two of which relate directly to the online operations and one involving "gaining complete control" of the online division. 

“BetMGM has carved out a solid position as the number-three US Online Gaming operator, occupying the leading position among the ‘Tier 2’ companies,” noted the analyst. “BetMGM achieved profitability in 3Q and recently launched single app single wallet in Nevada. We expect BetMGM will deliver its first year of profitability in 2025.”

Entain May Be a Willing Seller 

Due to changes in management and pressure from activist investors, Entain might be more inclined today than it was four years ago to negotiate with MGM regarding a deal. Nygaard-Andersen stepped down in December 2023, and activist investors have previously advocated for asset sales to raise cash. Selling the 50% stake in BetMGM would satisfy that requirement. 

Eminence Capital's founder Ricky Sandler, who has openly criticized the former Entain leadership, holds a position on the board, while Keith Meister's Corvex Management owns a share in the gaming firm. Meister serves as a director at MGM, and his hedge fund holds an equity stake in that operator. 

These might be some indications that the stars are favoring MGM to explore a bid for Entain this year, although neither the companies nor the investors have mentioned that discussions are occurring.