Proactive Investors - French gambling heavyweight La Française des Jeux (FDJ) has proposed a takeover of Kindred Group for an estimated £2.1 billion in a move that will position FDJ as the continent's second-largest operator.
Stockholm-listed Kindred, known for its popular betting brands Unibet, 32Red, and Bingo.com, received the 130 Swedish krone-per-share offer (980p) from FDJ over the weekend, after which Kindred's board issued a recommendation to its shareholders to accept the all-cash bid.
The offer represents a nearly 25% premium to Kindred’s last closing price and a multiple of 10.9x of Kindred’s 2023 underlying earnings.
In a press statement, Kindred said it had been exploring merger and sale options since April 2023.
“Following careful and exhaustive evaluation of alternative options including standalone long-term growth prospects of Kindred… the offer represents the most attractive outcome for shareholders of Kindred of the strategic review,” read the statement.
Kindred said it considered the company’s 2024 full-year guidance, as well as the “risks and uncertainties associated with executing against these prospects” when recommending the offer.
“These risks and uncertainties include possible negative impacts on the company and its business as a result of the highly competitive markets in which the company operates, as well as the potential impacts from adverse regulatory or other changes in the company’s locally regulated and .com markets.”
Total revenue in Kindred’s fourth quarter came to £312.9 million, representing a 2% year-on-year increase, while underlying earnings increased 45% to £56.8 million.
News of this potential consolidation sent ripples across the betting market, with Entain PLC (LON:ENT), the owner of high-profile brands Coral and Ladbrokes, seeing its shares climb by 3.8%, topping the FTSE 100 risers.
Similarly, 888 Holdings (LON:888), which acquired William Hill, enjoyed a 3.7% boost in its stock value. Flutter Entertainment, the parent company of Paddy Power, experienced a more modest increase of 0.7%.
Kindred’s Stockholm-listed shares rallied over 16% on news of the takeover bid.