Kindred Group plc to Close £175 Million Deal to Take Over 32RedPublished February 24, 2017 by Ivan P
Kindred Group plc, formerly known as Unibet, has made a £175 million offer to purchase their UK competitor 32Red, looking to boost their presence in the UK market.
Formerly known as Unibet, Swedish Kindred Group has reached an agreement with 32Red which should see Kindred become the new owner of 32Red. The deal, worth £175.6 million, is the first acquisition of this sorts for the company since Unibet bought Stan James back in 2015.
Similar Business Philosophy
In the press release announcing the takeover, 32Red's Ed Ware emphasized the two companies have always had similar business philosophies, and they are looking forward to continuing their joint efforts in the future.
The 32Red share price has been on a steady uptick as the company continues to improve their presence in the regulated markets like Italy and UK. Under the terms of the takeover bid, Kindred will pay 196p per share, while 32Red has agreed to pay the interim dividend of 4p per share to company's shareholders.
Finalizing Takeover Details
The Kindred Group offer, although almost a done deal, isn't there just yet. For the deal to go through, Kindred needs the acceptance of more than 75%, and up to this point, they've received confirmation from shareholders to the tune of 71.1%. The rest of the shareholders are expected to follow suit, especially given the fact Kindred has presented the recommended cash offer.
Once shareholders are on board, relevant gaming regulators will also need to give their approval before the deal goes through, but given the reputation of both companies, this seems like a pure formality.
New Approach for New Challenges
For Kindred Group, this acquisition is important as it will strengthen their position in the highly relevant and attractive UK market. At the same time, the deal follows the consolidation pattern that's been present in the gambling and bookmaking industry, with companies coming together in an effort to meet new tax and regulation burdens.
Not surprisingly, after the deal announcement has been released, the 32Red share price experienced a big 16% surge, increasing to 200p per share.