Kindred Group to acquire 32Red in GBP175.6m cash deal.
M2 EQUITYBITES-February 24, 2017-Kindred Group to acquire 32Red in GBP175.6m cash deal
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Kindred Group (STO:KIND-SDB), a provider of online gambling and digital contents in Europe, announced on Thursday that its board of directors has reached an agreement on the terms of a recommended cash offer with the board of directors of 32Red plc (LON:TTR).
Under this agreement, Kindred will acquire the entire issued and to be issued share capital of 32Red in an offer which values 32Red at GBP 175.6m.
32Red is a Gibraltar-based online gaming company, operating online casino, online poker, online bingo and online sports betting under the brands 32Red.com, 32RedPoker.com, 32RedBingo.com and 32RedSport.com. In 2015, 32Red acquired the Roxy Palace online casino business. 32Red is licensed and regulated in Gibraltar, the UK and Italy. In the financial year ended 31 December 2015, 32Red generated Net Gaming Revenues of GBP48.7m and EBITDA of GBP5.2m.
This offer is intended to be effected by means of a takeover offer under relevant Gibraltar law. Under the terms of the offer, 32Red shareholders will be entitled to receive GBP1.96 per share and will also be entitled to receive a second interim dividend of GBP0.04 per share. On this basis, the offer values the entire issued and to be issued share capital of 32Red on a fully diluted basis at approximately GBP175.6m.
The company added that this offer together with the approved dividend, represents a premium of approximately 16.3% to the closing price per 32Red share of GBP1.72 on 22 February 2017 (being the last business day before the date of this announcement) and 32.4% to the volume weighted average closing price per 32Red share of GBP1.511 in the one month prior to the date of this announcement.
Kindred will fund the cash consideration payable under the offer will by new acquisition facilities of up to GBP178m, specifically for the purposes of this transaction.
Also, Kindred Group has received irrevocable undertakings in support of the offer in relation to an aggregate of 60,701,232 32Red shares, representing approximately 71.1% of the share capital of 32Red.
According to the company, this transaction is consistent with its multi-brand strategy and will further enhance Kindred's position in the online casino market in the UK.
Completion of the transaction is subject to certain conditions including customary regulatory approvals by the relevant gambling authorities.
Kindred Group is licensed in Australia and 11 European member states.
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|Publication:||M2 EquityBites (EQB)|
|Date:||Feb 24, 2017|
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