Entain Is Out to Entice Enlabs With New $440m Takeover Offer

  • Entain’s initial offer was of SEK 40 ($4.72) per share, to a total value of $337m
  • About 51% of Enlabs shareholders have irrevocably agreed to accept the new offer
  • Alta Fox Capital led the charge to reject the first offer, calling for at least SEK 55 ($6.49) a share
  • Entain was subject to a takeover bid worth $11bn from MGM Resorts International in January
  • Enlabs operates online gambling brands that mainly focus on the Nordic and Baltic markets
female's hand places last jigsaw puzzle piece to cover the word acquisition
UK-based group Entain Plc has upped its offer to buy Sweden-based gambling company Enlabs AB to $440m. [Image: Shutterstock.com]

Update, March 22, 2021: Entain has announced that 94.2% of Enlabs shareholders have accepted its revised cash offer. An extended acceptance period will require any remaining shareholders to give approval by 1:00pm CET on April 1. Entain expects to settle the transaction on or around April 13.

On March 9, Entain announced that it had obtained all regulatory approvals required from the authorities in relation to the cash offer made to Enlabs shareholders. The latter had until March 18 to accept the takeover bid.

Brit makes the Swede a final offer

UK gambling group Entain Plc has increased its $337m offer to take over Enlabs AB to $440m. The cash offer to buy the Swedish-based gambling operator went up from SEK 40 ($4.72) to SEK 53 ($6.25) per share. The revised bid indicates an 18.6% premium on the last closing price of Enlabs’ shares. Entain clearly expressed that the new bid “is final and will not be increased.”

up from SEK 40 ($4.72) to SEK 53 ($6.25) per share

Entain deputy CEO and CFO Rob Wood confirmed the final offer on Monday morning, adding that the acceptance period is open until March 18. In his press release comments on the latest offer, he spoke about the importance of consolidation in a hugely competitive industry that is subject to a lot of regulation. Wood said: “Entain is able to provide the scale and platform needed to further support Enlabs’ long-term growth.”

Entain said it was pleased that approximately 51% of Enlabs shareholders “have irrevocably agreed to accept the offer and would urge other shareholders to do the same by 18 March.” About 42.2% of shareholders had approved the original offer. After receiving the new bid, the Enlabs board and independent bid committee both reiterated that they are in favor of joining Entain.

Reasons for refusing the initial bid

On January 7, Entain made its first takeover offer through its Bwin Holdings (Malta) Limited subsidiary. The original bid caused a divide among shareholders at Enlabs, despite chairman Niklas Braathen being in favor of accepting the offer. However, a group of investors ultimately refused, labeling the offer as “unsatisfactory and undervaluing” the company.

The Alta Fox Capital hedge fund led a group of shareholders to reject the original deal.

The hedge fund proposed a new price of at least SEK 55 ($6.49) a share, which would be worth $470m in total. It also questioned the motives of the Enlabs chairman in favoring the first offer, referring to the compensation Niklas Braathen would get following a takeover as a senior executive.

It now appears that Alta Fox Capital will accept the new offer from Entain. Entain’s March 1 press release regarding the new bid mentioned Alta Fox Capital as having “provided irrevocable undertakings to Entain to accept the Increased Offer” on February 28.

Two significant gambling operators

Entain – formerly GVC Holdings – already has an extensive range of gambling operators under its umbrella. Some of the more notable names include Ladbrokes, Coral, Bwin, Sportingbet, and PartyPoker.

Entain was on the receiving end of a takeover bid in January. The US-based casino company MGM Resorts International submitted an $11bn all-share offer for the gambling group, which the board rejected. Both Entain and MGM Resorts International are co-owners of the US-focused BetMGM online casino and sports betting brand.

Entain has benefited from strong levels of online gambling during the pandemic, with its share price rising significantly during this time. It will issue full-year results for 2020 on March 4. The group has plans to expand its reach in different regions while removing itself from unregulated markets in the coming years.

Enlabs currently operates gambling brands such as NinjaCasino, Laimz, and Optibet. The portfolio collection covers sports betting, online casino games, poker, and live dealer titles in a number of international markets. with Enlabs currently employs about 300 people and mainly focuses on the Nordic and Baltic markets.