Meister’s Corvex Lifts Kindred Stake to 15%

Posted on: August 11, 2022, 02:43h. 

Last updated on: August 11, 2022, 08:15h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

Keith Meister’s Corvex Management has boosted its investment in Kindred Group. It could be the latest indication the hedge fund wants the Swedish gaming company to put itself up for sale, and do so soon.

Corvex Kindred
Corvex Management founder Keith Meister speaks at an investment conference in New York. He boosted his stake in Sweden’s Kindred to 15%. (Image: Bloomberg)

Meister’s investment firm now owns 15% of Kindred’s shares outstanding, meaning that since the start of 2022, the hedge fund’s stake in the gaming company has tripled. Under the terms of the European Union’s Transparency Directive, Kindred is obligated to notify shareholders when an investor’s stake falls or rises in increments of 5%.

The notification obligation applies when the person acquires or disposes of voting rights in Kindred Group and thereby reaches, exceeds or falls below the thresholds of 5 %, 10 %, 15 %, 20 %, 25 %, 30 %, 50 %, 75 % and 90 % of the voting rights,” according to the company.

It was revealed in late May that Corve’s Kindred position jumped to 10.12% from 5% in February.

Corvex Wants Kindred to Sell

It’s no secret that Meister wants Kindred to position itself for sale. In May, his hedge fund issued a statement overtly saying the company should do exactly that.

“Given recent developments, we believe the Kindred Board should immediately retain a leading, global financial advisor to evaluate strategic alternatives, including the potential value that could be achieved through a sale or business combination,” according to Corvex.

At that time, Kindred said it was confident in its long-term outlook and ability to create value for investors. It added that it’s open to “constructive dialogue” with shareholders. In today’s regulatory filing revealing Corvex’s boosted position in the company, Kindred did not comment on the possibility of a sale, nor did it remark on talks — if any — with Corvex.

Kindred, which trades in Stockholm under the ticker “KIND,” is the owner of the 32Red, Bingo.com, Otto Casino, and Unibet brands. Kindred has some exposure to the US, the fastest-growing sports wagering market in the world. The operator says it’s the fourth-largest online gaming operator in the world as measured by gross winnings revenue.

Potential Buyers not Identified…Yet

In its May statement auguring for Kindred to explore a sale, Corvex doesn’t specifically potential suitors. Nor does the hedge fund say if it’s held a talk with parties that may be interested in acquiring the Swedish company.

However, the gaming industry consolidation rumor mill is heating up anew. For operators looking to add share or break into the US, Kindred could be an effective way of doing just that.

The Unibet brand holds licenses in Arizona, Indiana, Iowa, New Jersey, Pennsylvania, and Virginia, according to the Kindred website. Across sports wagering, iGaming, poker, and bingo, Kindred believes the global markets for those segments will sport 9% compound annual growth through 2025.

Additionally, there is some appetite for European digital gaming assets among US buyers. That’s highlighted by MGM Resorts International’s (NYSE:MGM) pending $607 million purchase of Sweden’s LeoVegas.