A significant potential merger
French gambling group Fran?aise des Jeux (FDJ) has submitted a takeover offer for Kindred Group. The online gambling operator confirmed on Sunday that it received an all-cash offer of SEK27.951m ($2.7bn), or about SEK130 ($12.45) per share. This is a premium of more than 24% of Friday’s closing price. ?
would create the second-largest online gambling company in Europe
FDJ said that the takeover would create the second-largest online gambling company in Europe. The company believes the acquisition would generate value for its shareholders, including a significant increase in its dividend.
Talking about the offer, FDJ Chair and CEO Stéphane Pallez noted that Kindred is a leading operator that combines “strong brands, best-in-class technology platforms, an attractive growth profile and a committed approach to responsible gaming.”
Getting support
Kindred has recommended that shareholders support the offer. The deal will need at least 90% support from shareholders and regulatory approval to proceed. The company’s share price has jumped more than 16% since the announcement of the FDJ bid.
Corvex Management, a hedge fund that owns about 15% of Kindred, recently called for a sale of the company. After gradually building its stake in the company, it now has a board seat. Corvex has issued public support for FDJ’s bid, alongside a number of other investment firms that in total own nearly 30% of Kindred.
A good fit for Kindred
Kindred has been carrying out a strategic review of its operations since April 2023 to try to identify ways to boost shareholder value. This has led to significant changes at the company, with most of the C-suite executives leaving, including the long-serving CEO. It announced in November that it will soon no longer cater to the North American market so that it can focus attention on other key markets.
revenue dropping 30% in its most recently reported quarter
Kindred has also been dealing with blowback in various European markets, which contributed to its revenue dropping 30% in its most recently reported quarter. It has temporarily withdrawn from the Netherlands market and is no longer operating in Norway.
FDJ runs lottery operations in France and also has a comprehensive retail sports betting network in the country. It also has online platforms for sports betting and casino games. FDJ has been eyeing different acquisition opportunities; it acquired Premier Lotteries, the operator of the Irish national lottery, in November for €350m ($381m).