What happened

Shares of MGM Resorts International (MGM 0.59%) closed down almost 6% on Monday, after a joint venture partner revealed that MGM is seeking to acquire it. 

So what 

MGM joint venture (JV) partner Entain (ENT 1.32%) revealed today that MGM has made an acquisition offer of approximately $11 billion. MGM and Entain -- formerly called GVC Holdings -- are partners in the BetMGM sports betting and online casino gaming app. Entain said the offer, which represents a 22% premium over last week's closing share price, "significantly undervalues the company and its prospects."

Man in sports stadium offering cash for a purchase

Image source: Getty Images.

Now what

Entain confirmed that it has received multiple offers, so MGM appears to be set on making the acquisition. Today's share-price drop indicates investors in MGM are betting the company will again increase its offer for Entain, which also owns British gambling brands Ladbrokes and Eurobet, among others. MGM's offers come after Caesars Entertainment merged with Eldorado Resorts last year and announced plans to acquire U.K.-based oddsmaker William Hill in a nearly $4 billion deal. 

BetMGM launched in 2018 and offers sports betting and online casino gambling using Entain's technology and MGM's casino brands. BetMGM announced its launch into Iowa today, marking expansion into its eighth U.S. state. 

As MGM waits for a full recovery in its brick-and-mortar casinos, BetMGM is a venture helping to spur growth. In addition to launching in states that have legalized sports gambling, BetMGM has added new partnerships with several professional sports teams. Long-term investors in MGM should consider today's drop an opportunity, though expect the casino-operator to increase its offer to try to get a growing segment fully under its corporate umbrella.