Rush Avenue Interactive Mulls Sale, Rumored Talks With DraftKings


Posted on: March 21, 2024, 03:59h. 

Final up to date on: March 21, 2024, 04:44h.

Shares of on-line gaming operator Rush Avenue Interactive (NYSE: RSI) rallied late Thursday on a report that the corporate is contemplating a sale and has reached out to a number of suitors, together with DraftKings (NASDAQ: DKNG).

Rush Street Interactive
A Rush Avenue Interactive commercial. The corporate is rumored to be in takeover talks and DraftKings may very well be a possible purchaser. (Picture: X)

Citing unidentified sources with data of the scenario, Bloomberg reported Thursday that Chicago-based Rush Avenue Interactive has contacted a number of potential consumers, together with rival DraftKings. The article didn’t point out different companies with which RSI might have had discussions.

The report sparked a late-day rally by RSI inventory, which traded as excessive as $7 earlier than settling at $6.39, good for a 4.41% improve. Shares of the web sportsbook operator are buying and selling barely larger at this writing in post-market buying and selling.

Backed by robust monetary steerage and an enviable iGaming footprint, amongst different components, the inventory is larger by 42.3% yr thus far and 96% over the previous yr, making it one of many best-performing gaming equities over these durations.

Rush Avenue Interactive Buyout Rumors Aren’t New

Ought to the Bloomberg report show correct, RSI being in discussions to promote itself would run counter to a thesis just lately floated by a sell-side analyst who famous that the corporate in all probability isn’t a near-term takeover goal.

Hypothesis concerning the operator being in play isn’t new, nonetheless. Takeover discuss Rush Avenue Interactive dates again to not less than 2021 with ESPN beforehand rumored as a possible purchaser. Final yr, a number of experiences surfaced indicating RSI may very well be a buyout candidate and in Might 2023, CEO Richard Schwartz stated on the SBC Summit North America that he’d preserve an open thoughts ought to potential consumers come calling.

Whereas takeover discuss Rush Avenue Interactive isn’t new, the corporate is a beautiful goal. It’s more and more worthwhile, carries no debt, and has publicity to the fast-growing Latin America market by way of Mexico and Colombia, which means it may very well be positioned to acquire a coveted Brazilian gaming license.

Within the US, RSI operates beneath the BetRivers and PlaySugarHouse manufacturers, and is at present accessible with cell or retail companies in Colorado, Delaware, Illinois, Indiana, Iowa, Michigan, New Jersey, New York, Pennsylvania, Virginia, and West Virginia. The agency additionally presents sports activities wagering in Ontario, Canada.

Checklist of Consumers for RSI May Be Lengthy

Rush Avenue Interactive closed Thursday with a market capitalization of $1.32 billion, in line with In search of Alpha information, which means the operator may very well be approachable for an intensive record of bigger rivals, together with DraftKings.

Ought to RSI proceed with a sale, the value would seemingly exceed its market worth, however a probably vital premium may very well be justifiable to potential consumers given the operator’s power in iGaming. That features a newly cemented monopoly in Delaware.

Whereas RSI is a bit participant when it comes to on-line sports activities betting market share, its web on line casino footprint may very well be engaging to quite a few consumers who want to cement management in that house, similar to DraftKings, or these in search of added share in that enviornment.

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