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Entain’s £250m bid declined by Enlab investors
The European iGaming giant has announced its offer to obtain Baltic-facing Optibet operator Enlabs for SEK2.80bn (£250m/€276.4m/$340.1m). Entain has valued Enlabs shares at SEK40, about a 15.6% premium of its volume-weighted average price just 90 days beforehand.
Enlabs shareholders who hold a 10.7% stake in the company have however declined the offer because they believe it undervalues the company.
The shareholders have denounced the offer, claiming it “materially undervalues” the company. Alta Fox Capital Management, currently representing 3.34% of total shares, have rejected the bid with the support of minority shareholders like Topline Capital and private investors including Jimmy Jonsson, Hans Isoz, and Ludwig Pettersson. Alta Fox set forth an alternative offer, which they deem more appropriate, of SEK55 per Enlab Share.
Alta Fox stated: “Alta Fox confidently believes we have the support to block a squeeze-out of minority shareholders, legal counsel to ensure their fair treatment under Swedish law, and the determination to obtain a fair price that is reflective of Enlabs’ standalone growth prospects.”
In an recent PR, Entain, formerly known as GVC Holdings plc, said: “In a highly competitive and regulated industry, Entain believes scale and diversification is essential to continue to create shareholder value”
“Entain places great value on Enlabs’ organization and, by leveraging Entain’s scale, proprietary technology, marketing skills and products, will drive further growth in order to create long-term positive effects for Enlabs employees and other stakeholders. The acquisition of Enlabs represents a synergistic combination with a preeminent operator, with high operating standards and a market-leading customer proposition.”
Entain commented on the strategic move saying: “The Baltic region represents a highly attractive, locally regulated and fast-growing gaming market. Entain does not currently operate in these geographies and entry is aligned with Entain’s strategy to focus on growth markets which are locally regulated and taxed.”
The news comes as Entain Plc has been discussing the appointment of a new CEO after the sudden departure of Shay Segev, seeking a role with higher financial rewards at DAZN sports streaming site. Sources state that Entain Plc are in ‘advanced discussions’ to appoint Jette Nygaard-Andersen as their new chief executive officer, what will make her the first female CEO for any British-listed gambling group.
Just last week, the £8.09 billion ($11 billion) takeover battle with MGM and Entain took a left turn as Entain’s CEO Shay Segev quit. Furthermore, Entain’s biggest shareholders were already unsure about the takeover, stating that the £8.1bn proposal undervalued the company. Currently, Entain’s market cap dropped sharply by 12.5% to £7.3bn causing its value to decrease by around £1bn after MGM dropped out.
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