FDJ acquisition of Kindred to create Europe’s second-largest gambling group
The French giant has made an offer worth €2.45bn for the Swedish online gaming operator.
Sweden.- Kindred Group announced last April that it was reviewing options, including the possibility of a sale. Now a firm candidate has emerged. The French lottery and gambling operator La Française des Jeux (FDJ) has made a SEK27.96bn (€2.45bn) offer for the Swedish online gambling group.
After the news was published by the Wall Street Journal, Kindred confirmed that it has received a cash offer of SEK130 per Swedish Depository Receipt (SDR), some 24.4 per cent over the SEK104.50 closing on Friday (January 19). Kindred said the offer is worth 10.9x of its underlying EBITDA for 2023.
Kindred has recommended shareholders accept the offer, and five major shareholders (Corvex Management, Eminence Capital, Nordea, Premier Investissement and Veralda Investment) say they support the offer. Together, they hold 27.9 per cent of all Kindred shares.
The acceptance period is expected to begin around February 20 and run until November 19. The offer requires acceptance by 90 per cent of shareholders and will require regulatory approval. It also depends on no other party submitting an offer.
FDJ said the acquisition, if it goes ahead, would create the second-largest gaming operator in Europe and a “European gaming champion” with improved growth in revenue and earnings. It said the deal would create value for its shareholders, boosting dividends per share by more than 10 per cent.
FDJ chair and CEO Stéphane Pallez said: “Fully aligned with our strategy, [the deal] will give the group a diversified and balanced profile, based on several pillars: monopoly activities, mainly the lottery in our historical French market and, since November, the acquisition of the Irish lottery operator Premier Lotteries Ireland; and online sports betting and gaming activities open to competition in Europe.
“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. Given their respective histories, strategic strengths and core values, FDJ and Kindred are highly complementary. The combination will result in a stronger strategic positioning and significant value creation for the benefit of our shareholders and broader stakeholders.”
Kindred CEO Nils Andén said: “I’m delighted with today’s transaction announcement between FDJ and Kindred, creating a leading European gaming operator with the financial and strategic capabilities to further expand its global footprint.
“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. It will also speed up our path towards 100% locally regulated revenue.
“I’m excited to bring Kindred’s extensive experience and know-how into FDJ’s organisation, contributing to the development of a leading online gaming business. I’m also very proud that FDJ acknowledges and values the skilled employees and strong assets within Kindred.”
Kindred’s strategic review announced last April has seen the group announce its exit the North American market as part of a plan aimed at reducing costs by around £40m. Kindred had a presence in North America since 2018, with Unibet US operating in Arizona, Indiana, New Jersey, Pennsylvania and Virginia. It is also active in Canada. The group said financial and technological resources would be reallocated to core markets in Europe. It also has operations in Australia and Asia.
