Transfix re-enters the chat and Ackman scores on Universal

DraftKings (DKNG: $52.77 -7.42%) is making a $20 billion offer to acquire U.K. online sports betting company Entain, people familiar with the matter told CNBC’s David Faber on Tuesday.

The offer is largely in DraftKings stock, along with cash, according to the sources.

Entain shares jumped about 18% in London trading Tuesday. DraftKings shares closed 7.4% lower Tuesday after the news.

On Monday, before news of the deal, the enterprise value of Entain was about £13.2 billion, or $18 billion.

In a filing with the London Stock Exchange, Entain’s board confirmed that it received a proposal from DraftKings, which would include a combination of stock and cash. The filing did not contain any information on the price of the offer.

“A further announcement will be made as and when appropriate,” Entain noted in the filing. “Shareholders are urged to take no action at this time.”

The U.K. gaming company rejected an all-stock offer from MGM Resorts earlier this year worth $11 billion at the time. Entain said the deal significantly undervalued the company.'

MGM and Entain have an online sports betting partnership in the U.S. called BetMGM.

While MGM is not involved with DraftKings’ bid for Entain, MGM’s consent is required for any deal involving the U.S. assets of Entain, the company said.

The SEC handed Ackman’s hedge fund a windfall by nixing his SPAC’s plans.

Bill Ackman may end up liquidating his special purpose acquisition company, but his hedge fund firm just had its best day ever: a $1.6 billion haul.

Ackman’s Pershing Square Capital made that windfall Tuesday, when its $4 billion stake in Universal Music ahead of its initial public offering paid off after shares rose 40 percent on the opening. 

Pershing Square Holdings, Ackman’s publicly traded hedge fund, put $2.9 billion into the deal, and Ackman was able to raise another $1.1 billion in a new co-investment vehicle for the rest of the 10 percent stake, making Universal the biggest position for his firm.

The hedge fund made an estimated 9 percentage points on the gain. That will more than make up for the losses it is carrying on Ackman’s SPAC, Pershing Square Tontine Holdings (PSTH), based on the value of the warrants it holds. (As of August 17, Tontine was Pershing Square’s biggest loser for the year, accounting for 6.4 percentage points of losses and dragging down the fund’s overall performance, according to its semi-annual financial statement.)

But now Pershing Square Holdings, which was up 7.7 percent for the year as of Sept. 14, has taken off: It is up an estimated 18 percent for the year.  

Ackman declined to comment. But the huge windfall for his hedge fund isn’t what he had in mind when he began talking with Universal parent Vivendi, the French conglomerate, last November. At the time, the plan was for Tontine to invest in the company. 

The deal was complicated and unusual for a SPAC because it wouldn’t have ended in a merger, and the SPAC would have had money left over.

After Vivendi announced a deal had been struck with Tontine to take a 10 percent stake in Universal ahead of a spinoff of 60 percent of the company, Tontine’s stock sank. Within weeks the U.S. Securities and Exchange Commission said it would not approve the SPAC’s plans, and the Tontine board abandoned the proposal.

“It was a dagger in the heart,” Ackman told CNBC the day of that announcement.