FDJ makes takeover offer for Kindred Group

Following reports in the Wall Street Journal over the weekend, Kindred Group have confirmed in a press release that the company has received a takeover offer from French gambling  business Française des Jeux SA (“FDJ”).

A news release on Kindred’s corporate website Sunday evening, read as follows:

“Following press articles regarding the strategic review process, including specific information on a potential public offer by FDJ, Kindred confirms that FDJ has offered to acquire the entire outstanding share capital of Kindred. The takeover offer from FDJ is expected to be announced on Monday morning (22 January 2024), before opening of the market.”

The Wall Street Journal reported the offer to be worth around $2.5 billion.

FDJ have been on the acquisition trail of late, completing a EUR 350 million purchase of Premier Lotteries Ireland late last year.

FDJ began life as France’s national lottery operator in 1933 and to this day hold exclusive rights to operate offline and online lottery games in France. They also offer sports betting and other online gambling products in competition with other licensed operators.

FDJ generated around EUR 2.5 billion in revenue in 2022, with just under EUR 2 billion of that coming from lottery product sales.

The Kindred purchase if completed, will give FDJ ownership of Kindred’s 9 well known online gambling brands including Unibet and 32Red. The group boasts 30 million registered customers worldwide, 1.5 million of them considered to be active. Group revenues of over £1 billion were reported for each of the last 3 financial years.

Further details of the acquisition offer were released before share markets opened on Monday (January 22).

The offer

FDJ has offered 130 SEK per share, equating to a total offer value of SEK 27,951 million (€2.46 billion,  $2.67 billion, £2.1 billion).

The offer represented a 24% to Kindred’s pre weekend closing share price, a 35% premium to their 30 day volume-weighted average Nasdaq Stockholm trading price and a 40% premium to Kindred’s share price on 28 November 2023 which was prior to release of Q3 results which contained a board statement that shareholder value would be maximised from an acquisition.

The offer acceptance period begins 20 February and expires 19 November 2024, and is conditional on FDJ becoming owners of at least 90% of Kindred shares. An amendment of Kindred’s articles of association is required to allow for as much.

The Kindred board has unanimously recommended that shareholders accept the offer and an extraordinary general meeting has been scheduled for 16 February with the required changes to the articles of association one of the agenda items.

“Having concluded this assessment, the Board believes that the terms of the Offer recognise Kindred’s long-term growth prospects, taking into account the risks and uncertainties associated with the realisation of those prospects. The Board therefore unanimously recommends the shareholders of Kindred to accept the Offer.”

Kindred’s share price jumped following confirmation of the offer price, closing at SEK 122 per share.