Groupe FDJ has signaled its ambitions to create a “new European gaming champion” by submitting a €2.6 bn tender offer to acquire Kindred Group Plc outright.
The Euronext exchange in Paris was notified of the proposal, as a result of which the company’s Board of Directors received a proposal to set the share price at SEK 130 (€ 11.40).
According to the FDJ report, the offer represents a premium of 24% over the closing price on 19 January 2024 and 35% to the weighted average price for the last 30 trading days, corresponding to a total enterprise value of €2.6 bn.
FDJ has informed related investors of its plans to create a new European company combining lotteries, games and bookmakers, which will instantly become the “second largest operator in the gaming sector” in Europe.
The strength of FDJ’s strategy is underlined by the fact that the offer was “unanimously recommended by Kindred’s Board of Directors” and “five key shareholders, holding a combined 27.9% of the capital, unequivocally support the transaction and FDJ’s terms”.
Subject to unanimous shareholder approval, FDJ will launch a cash tender on February 19, 2024, commencing a nine-month period to complete the merger with Kindred, subject to required regulatory approvals.
Stéphane Pallez, Chairwoman and CEO of FDJ Group, commented: “I am pleased to announce today the proposed acquisition of Kindred. Fully aligned with our strategy, it will give the Group a diversified and balanced profile, based on several pillars: the monopoly activities, mainly the lottery, on our French historical market and, since November, in Ireland, with the acquisition of the Irish lottery operator PLI; and online sports betting and gaming activities open to competition in Europe. Given their respective histories, strategic strengths and core values, FDJ and Kindred are highly complementary, and I will be delighted to welcome Kindred’s management team and many talented individuals into the combined Group following this transaction. The combination will result in a stronger strategic positioning and significant value creation for the benefit of our shareholders and broader stakeholders.”
Paris Euronext announced that FDJ will “refinance the bridge loan on market terms” to finance its €2.6 bn proposal. This allows us to maintain long-term net debt EBITDA at 2x.
Shareholders will be provided with a prospectus disclosing plans to combine FDJ’s and Kindred’s proprietary technology systems. This aims to create a multi-market gaming group operating in 100% regulated markets in France, Sweden, the Netherlands, UK, Ireland and Belgium, with the aim of leveraging synergies.
Ahead of the deal, Kindred issued a 2023 target, forecasting gross profit of £1.17 bn as well as underlying FY2023 EBITDA of £205m full-year trading equivalents.
Nils Andén, CEO of Kindred, added: “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.”
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