DraftKings Mulls Takeover of 888 Holdings Amid Struggles
DraftKings, a prominent American sports betting company, has reportedly considered a takeover of 888 Holdings as the latter company experiences difficulties. While DraftKings has not yet made a formal approach to 888 with a takeover proposal, it has been contemplating the possibility and engaging in discussions with 888 shareholders.
According to a report by the Financial Times, DraftKings explored the idea of a takeover during the summer and even held preliminary discussions about the potential acquisition. Jason Robins, the CEO of DraftKings, reportedly met with representatives of FS Gaming, a major shareholder of 888 Holdings, to discuss the takeover and inquire about the possibility of an all-stock acquisition.
The timing of these talks aligns with 888 Holdings’ search for a new CEO, which resulted in the appointment of Per Widerström. The company has faced challenges including a decline in its share price, management and business issues, regulatory complications, and a license review, making it an attractive target for takeover attempts, according to financial analysts.
The Financial Times suggests that DraftKings could have theoretically acquired 888 Holdings for approximately $676.9 million based on its market capitalization at the time. However, analysts point out that 888 Holdings’ significant outstanding net debt could pose a problem for any potential acquirer, especially after the company’s acquisition of William Hill earlier in the year.
DraftKings’ consideration of a takeover aligns with its overall expansion strategy, as the company continues to pursue growth opportunities in the sports betting and gambling industry.
Meanwhile, DraftKings announced its financial results for the third quarter of 2023, reporting revenue of $790 million for the period. This strong performance led the company to update its full-year revenue guidance to a range of $4.5-4.8 billion, reflecting the success of its business strategy.
The positive results were attributed to DraftKings’ expansion into new jurisdictions, which are expected to have a favorable impact on the company’s adjusted EBITDA for 2023. Recently, the company launched in Maine and experienced a successful debut during the state’s first weekend of regulated sports betting.