Entain Sweetens Bid for Fellow Gambling Firm Enlabs

Gaming and sports betting powerhouse Entain has sweetened its bid for Enlabs after some of the shareholders of the Swedish gambling group winced at the original price offered.

Entain, which up until recently traded as GVC Holdings, said Monday that it has renewed its offer and has raised it from SEK40 to SEK53.

The new price values Enlabs at around SEK3.7 billion (equivalent to approximately £316 million). The major gambling operator said that the increased offer is final and will not be revised further.

Entain first announced plans to acquire the other group in mid-January. The SEK40-per-share offer was accepted by 42.2% of the latter company’s shareholders. However, hedge funds controlling more than 10% of its shares rebelled against that price, arguing that it undervalued Enlabs.

These hedge funds said they would not accept a price lower than SEK55. News emerged Monday that those were backing the sweetened offer. Entain confirmed that shareholders holding 51% of its acquisition target’s shares have undertaken to accept the increased price. The company needs backing from 90% of Enlabs’ shareholders by March 18.

Commenting on the latest news, Entain CFO and deputy CEO Rob Wood said that they are “able to provide the scale and platform needed to further support Enlabs’ long-term growth, and we firmly believe that Entain will be the best home for Enlabs, its employees and customers.”

Busy Times

Enlabs is a fast-growing gambling operator with brands like Optibet, Laimz, Bestpoker, and Ninja Casino in its portfolio. The company is particularly focused on the Baltics and boasts significant presence in Lithuania, Latvia, and Estonia.

Late last year, it acquired fellow operator Global Gaming in a SEK150 million deal. The move meant a new direction for the latter which was reeling from a nightmare year at the time the acquisition was closed. In the summer of 2019, Global Gaming had its Swedish license revoked and courts in the country persistently quashed every attempt of the company to return to the local market.

Following the purchase of Global Gaming, Enlabs voluntarily surrendered its Swedish licenses to the local regulator, saying that it would apply for new ones in 2021 as it needed to incorporate Trustly’s Pay N Play technology into its platform.

Entain itself has had a busy time over the past few months. The company which owns the likes of Ladbrokes and partypoker underwent a corporate rebrand and announced exit from all unregulated markets. It also became a takeover target of its US sports betting joint venture partner MGM Resorts International.

In January, the major casino group made an $11 billion takeover offer, but Entain rebuffed it saying it significantly undervalued the company.

In a surprising move, Entain’s CEO of several months, Shay Segev, quit the gambling powerhouse just as it was trying to bat away MGM’s bid. Mr. Segev replaced the company’s long-time boss Kenny Alexander in the summer of 2020.

Last month, the firm was confirmed as one of a handful of bidders for the betting and media unit of Australian gambling behemoth Tabcorp.

Source: “Entain increases the offer price to SEK 53 in cash per share in Enlabs”, Entain PR, March 1, 2021