Entains’ Enlab Takeover Gains Regulatory Approval

Entain, a global sports betting and gaming entertainment company, has announced that its takeover offer for Enlabs has received all regulatory approvals from local competition and gaming authorities.

Initial attempts to buy the Baltics online gambling group were made in January in a SEK 40 per share transaction that priced the company at SEK 2.8 billion, or about £250 million, and came only a few months after Entain had turned down an £8 billion offer from its US affiliate MGM Resorts International.

Improved offer

Following that, the company, through its wholly-owned Bwin Holdings subsidiary, returned at the beginning of this month with an improved offer of SEK 53 per share, valuing Enlabs at about SEK 3.7 billion, or £316 million.

After a number of interested parties, including a 10 percent stake in Enlabs, indicated that the original deal “materially undervalues the company,” the company’s independent bid committee reportedly told the company that it was proposing that shareholders approve the offer.

The condition for the fulfilment of the bid, namely the receipt of all requisite regulatory green-lights, has been met as a result of the latest collection of approvals, with the acceptance period set to expire at 17:00 CET on March 18, 2021. Entain retains the opportunity to prolong the offer’s approval time and to delay the settlement date.

Shareholders acceptance

A number of shareholders who had previously expressed opposition to the acquisition have now “provided irrevocable undertakings to Entain to accept the increased offer,” according to the group.

Individuals owning just under 51 percent of Enlabs shares have committed to consider the new bid, which the company claims is “more attractive” to shareholders.

Entain posted flat sales for 2020 at £3.62 billion (2019: £3.63 billion), a 3 percent reduction in gross profit to £2.30 billion (2019: £2.36 billion), and an 11 percent increase in underlying EBITDA to £843.1 million (2019: £761.4 million) last week, despite a commitment to becoming net zero for greenhouse gas pollution by 2035.

The year’s big delays, according to the company, occurred in Q2 and Q3 due to store closures and global sporting interruptions, with a good showing prior to the imposition of COVID-19 constraints subsequently offset.