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Entain to dominate in the Baltics, with a $1bn buyout of OEG
Amid claims of negotiating a $1 billion buyout of Olympic Entertainment Group (OEG), curiosity grows over Entain Plc’s next M&A move.
Entain would become the number one brand in the Baltic gaming markets of Estonia, Latvia, and Lithuania, where OEG runs 100 Olympic Casino sites and its leading betting brand OlyBet, if it were to acquire OEG.
Last spring, Entain started its Baltic growth by purchasing Enlabs AB for €370 million, integrating OEG’s primary online gambling competition Optibet to its European multi-brand collection. Entain needs to make more progress into the Baltic and Eastern European marketplaces.
As gaming PLCs adapted to changing regulatory frameworks in the Netherlands and Germany and waited for more reforms to be authorized in the UK, Spain, and Sweden, Q3 updates highlighted pricey Western European market modifications throughout the board.
Following the failure of owner Novalpina Capital, the sale of OEG was seen as a potential consequence.
Novalpina paid €300 million for OEG, founded by Armin Karu and his business partner Jaan Korpusov. The London private equity fund attempts to resolve a disagreement among its founders and investors over fund management, investment control, and the right to vote.
Novalpina’s Luxembourg-based strategic vehicle Odyssey AS completed the transaction, which saw OEG excluded from the Tallinn Nasdaq Exchange.
According to Bloomberg, Entain had several alternatives for structuring a transaction with a ‘dysfunctional Novalpina,’ including buying individual market-by-market assets to accommodate its Eastern European growth aspirations.
Regardless of OEG’s agreement, the market expects Entain to have a crucial end-of-year, as US wagering partner MGM Resorts is likely to exhibit its hand on a buyout proposal, which will be scrutinized once more by Entain’s board of directors.
Entain rejected MGM’s $11 billion (1,383 pence per share) deal in January, and Chairman Barry Gibson declined to present it to investors, claiming that MGM had “seriously under-valued Entain’s future potential.”
Gibson was confirmed correct when DraftKings, a US competitor, launched a £28 per share approach this summer, putting Entain at £18 billion. DraftKings’ strategy would be shelved, prompting industry analysts to speculate on how MGM may revalue and organize its planned transaction.
MGM governance has been faced with pricing up US wagering’s hyper-growth trajectory against the backdrop of compliance-burdened European marketplaces to secure a deal that will reshape the sector’s future makeup as part of global gambling’s never-ending M&A narrative.
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