American sports betting giant DraftKings had considered a takeover of 888 Holdings amid the struggles experienced by the latter company. While the former company has not yet approached 888 with a takeover proposal, it mulled over the possibility and discussed the matter with 888 shareholders.
According to a report by the Financial Times, DraftKings considered the takeover attempt during this summer. The financial news outlet also pointed out that the gambling company had engaged in preliminary discussions about the acquisition.
In June and July, Jason Robins, DraftKings’ chief executive officer, met with representatives of FS Gaming, a major 888 shareholder. Robins reportedly discussed the takeover with FS Gaming, inquiring about the possibility of an all-stock takeover of 888 Holdings.
The talks happened around the same time 888 Holdings was on the lookout for a new chief executive officer. For reference, that position was recently taken by Per Widerström who departed from a number of NED positions to dedicate all of his time to 888.
888’s Hurdles Make It a Tempting Takeover Target
Financial analysts believe that 888 Holdings’ precarious position makes it an ideal target for takeover attempts. In addition to its slumping share price and management and business challenges, the company had to deal with regulatory complications and a review of its license.
As a result, the Financial Times believes that DraftKings could have theoretically acquired 888 Holdings for roughly $676.9 million, based on its market capitalization at the time.
However, 888 Holdings’ massive outstanding net debt could have been a problem, according to analysts. For reference, earlier this year the company acquired the British gambling giant William Hill from Caesars Entertainment.
DraftKings’ consideration of a takeover aligns with the company’s overall expansion strategy.
DraftKings Maintains a Strong Momentum
In the meantime, DraftKings published its financial results for the third quarter of 2023. The company posted revenue of $790 million for the period, which attests to the success of its business strategy.
As a result of its strong Q3 results, DraftKings updated its FY 2023 guidance and is now expecting full-year revenue in the range of $4.5-4.8 billion.
The favorable results were attributed to the company’s launch in a number of new jurisdictions. The new launches are also expected to have a positive effect on the company’s adjusted EBITDA for 2023.
Speaking of launches in new jurisdictions, the company recently went live in Maine, enjoying a stellar launch during the first weekend of regulated sports betting in the state.
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