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Shares in Flutter Entertainment and Penn Entertainment have risen nearly 5% over the past five days, following rumours that Flutter might join Boyd Gaming in a bid to acquire Penn.

The potential sale of Penn Entertainment has stirred significant buzz and speculation in the market, despite the absence of official confirmation of any acquisition offer thus far.

Boyd’s $9bn offer

Last month, Boyd Gaming approached Penn Entertainment with a potential $9bn acquisition offer, according to unnamed sources quoted in a Reuters report.

The approach was seen as a response to growing investor dissatisfaction with Penn’s current strategy.

Investor discontent has been mounting lately, with activist investor Donerail Group penning an open letter in May calling for a sale of the business.

Donerail Group managing director William Wyatt argued that Penn’s “misguided interactive strategy” and poor capital allocation have destroyed shareholder value.

He emphasised the need for a strategic shift and suggested that a sale of Penn’s assets could unlock value for shareholders.

This suggestion has ignited widespread debate within the investment community about the future direction of Penn’s digital and interactive gaming assets.

Hard Rock and other potential buyers

Following Donerail’s letter, Hard Rock has been suggested as a potential buyer for Penn.

However, recent developments suggest another significant player might be in the mix.

According to a report in The Deal last week, Flutter has expressed interest in teaming up with Boyd Gaming to purchase the business.

In this proposed arrangement, Boyd Gaming would take over Penn’s retail gambling business, while Flutter would gain control of its digital assets, including the operations behind ESPN Bet.

Rumours have continued to spread as a potential Boyd-Flutter partnership would build on an existing relationship between the two companies.

Boyd Gaming already holds a 5% stake in Flutter-owned FanDuel, a connection formed through a market access deal that has allowed FanDuel to obtain gaming licences in several states.

Strategic board appointments?

In a move signalling strategic shifts, Flutter recently appointed former Disney executive Christine McCarthy to its board.

Simultaneously, Boyd Gaming has tapped a former Barclays investment banker for its board, further fuelling speculation about its intentions regarding Penn Entertainment.

Share price gains

The swirling rumours have undoubtedly captured the attention of investors and industry analysts, with the potential acquisition poised to significantly reshape the gaming and entertainment landscape.

Over the past 30 days, shares in Penn Entertainment have seen a significant gain of 16.35%, making it something of an interim winner in the market.

However, this contrasts sharply with price declines of 18.22% over the last six months and 22.6% over the past year at Penn.

Meanwhile, Flutter shares have increased by 4.56%, and Boyd Gaming shares have risen by 4.05% during the same period.

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