Score Media Rumored to Be Takeover Target for DraftKings
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Posted on: March 1, 2021, 12:08h.
Last updated on: March 1, 2021, 01:44h.
Just a few days into life as a company listed on a major US exchange, Score Media & Gaming (NASDAQ:SCR) is a subject of takeover rumors that are sending shares of the Canadian company soaring today.
In late trading, shares of the media company and sportsbook operator are higher by more than six percent. That’s on volume that’s more than quadruple the daily average, all following a report that rival DraftKings (NASDAQ:DKNG) is looking for deals and could have Score Media in its sights.
Some of the names rumored more recently to be on DraftKings’ radar are media companies, including TheScore and John Skipper and Dan Le Batard’s nascent Meadowlark Media venture; small sports properties, including the X Games; and the poker company Run It Once,” reports Insider.
To be sure, DraftKings dealmaking is in the rumor phase at the moment. However, Macquarie analyst Chad Beynon said in a note to clients earlier today that he expects the company will address merger and acquisition opportunities at its investor day on March 9.
A request for comment from Score Media wasn’t returned prior to the publication of this article.
Score Makes Sense for DraftKings
The company behind theScore Bet mobile app makes for a practical target for DraftKings because the Boston-based company has long been rumored to be interested in bringing a pure-play media outfit into its fold.
Additionally, the Canadian company would likely be affordable for DraftKings. Following a recent initial public offering (IPO) in which it raised $186.3 million and graduated to a Nasdaq listing, Toronto-based Score Media has a market capitalization of $1.17 billion. DraftKings is valued at $22.64 billion.
Not yet a year removed from its own IPO, DraftKings has a pristine balance sheet. However, it’s not yet profitable.
As of the end of 2020, the sportsbook operator has $1.8 billion in cash and no debt. Additionally, with its stock ascending to all-time highs today, the company could easily use its equity as currency, should it find a suitable takeover target.
Score Doesn’t Need to Sell
While acquisition rumors previously swirled around Score Media, it’d be unusual for a company so closely removed from an IPO and move to a prominent US exchange to sell itself.
Additionally, theScore is live in Colorado, Indiana, Iowa, and New Jersey. DraftKings already has exposure there. Then there’s the recent legalization of single-game sports betting in Canada, which is expected to benefit Score Media more than any other company. That could make the company reluctant to sell, while simultaneously making it a more attractive target for a suitor.
“TheScore would offer DraftKings a media partner that could help funnel more sports fans to its sportsbook and a larger foothold in Canada,” according to Insider.
One more interesting tidbit: DraftKings rival Penn National Gaming (NASDAQ:PENN) owns 4.7 percent of Score Media, meaning that if DraftKings makes a move on the Canadian operator, it could enrich one of its most direct competitors in the process.
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