Kindred Group on Verge of $2.7B Takeover by French Lottery Giant FDJ
Posted on: January 22, 2024, 07:33h.
Last updated on: January 22, 2024, 07:33h.
Francaise Des Jeux (FDJ.PA), the French national lottery operator, has made a US$2.67 billion move for Stockholm-listed online gambling giant Kindred Group (KIND SDB).
On Monday morning, Kindred’s board of directors said in a statement it unanimously recommended that shareholders accept the all-cash deal, which values Kindred shares at SEK130 (US$12.47), a 24.4% premium on their value at close of trading on January 19.
Former State-Owned Monopoly
FDJ is the largest gambling operator in France. Previously a state-run company, in July 2018 the French government made the decision to take the company public by selling off 50% of its ownership. As well as holding the monopoly on the French lottery, it also offers casino games and sports betting.
In November this year, FDJ acquired Ireland’s national lottery operator, Premier Lotteries Ireland, which made it the second-biggest lottery operator in Europe and the fourth biggest in the world.
Kindred, formerly Unibet Group, owns some of Europe’s best known online casino and sports betting brands, including Unibet and 32Red. But it has endured a tough couple of years that saw it recently withdraw from US markets after its sports betting services failed to gain traction.
US hedge fund Corvex is a major shareholder in Kindred (15%) and has been pushing for a sale since mid-2022. That’s after the company reported a 30% decline in revenues, largely because it had been forced to withdraw temporarily from the Dutch market when that country ushered in its new licensing regime.
Kindred Spirits
Kindred chief executive Nils Anden said the deal would create a new European gaming powerhouse, well positioned to rival existing giants like Entain and Flutter Entertainment.
I believe that combining with FDJ, Kindred can accelerate the delivery of long-term strategic projects, continue to grow in core markets, and provide a trusted source of entertainment to customers,” he said in a statement Monday.
FDJ chair Stéphane Pallez added that the enlarged company would “result in a stronger strategic positioning” for FDJ in sports betting. “In this market, Kindred is one of the leading operators, combining strong brands, best-in-class technology platforms, an attractive growth profile and a committed approach to responsible gaming,” she said.
In a note Monday, Regulus Partners suggested the real attraction of Kindred to the former state-owned outfit was that “it allows excess cash flow generated from a privatized state monopoly to be pumped into a ready-made competitive platform which the sclerotic, statist FDJ failed organically to create.”
The deal is dependent on 90% of Kindred shareholders accepting the bid and is subject to regulatory approvals.
Source: casino.org
