February 06, 2024 | Consumer Discretionary | Europe | Active

Kindred Group / La Francaise des Jeux: Deal Insight

On 22-Jan-24, French gaming company La Française des Jeux (“FDJ”) announced a takeover offer to acquire its Swedish peer, Kindred Group, through an all-cash offer, aiming to create the second-largest gaming operator in Europe. The SEK 130 per share consideration values Kindred at SEK 28.0bn (€2.5bn), representing a 24.4% premium over the previous day’s close on 19-Jan-24. The offer is cum-dividend and will be adjusted lower for any dividends that Kindred distributes. Kindred’s board concluded a strategic review of the company in April 2023, followed by a competitive bidding process. Consequently, the board unanimously recommends its shareholders to accept the offer, a decision supported by a fairness opinion from Jefferies. The tender offer is subject to a 90% minimum acceptance condition. Certain Kindred shareholders – Corvex Management (16.6%), Premier Investissement (4.0%), and Eminence Capital (3.5%) – collectively hold 24.2% and have entered into undertakings to accept the offer and vote in favour of an amendment of the articles of association. This vote will permit a shareholder controlling 90% of voting rights to require minorities to transfer their shares to the owner, essentially enabling FDJ to squeeze out at 90%. Critically, each of these irrevocables is hard, and remain in place “irrespective of whether a higher competing offer is made.” However, the irrevocables terminate if the offer is not declared as unconditional before 31-Dec-24, which can be extended to 22-Jan-25 if the offer period is prolonged. Similarly, Nordea (1.5%) and Veralda Investment (2.3%) have ...

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