MGM, UK Gaming Companies May Be Eyeing Kindred Takeover

Posted on: July 28, 2023, 01:29h. 

Last updated on: July 28, 2023, 01:29h.

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

Though the gains of have been erased, shares of Kindred Group (OTC: KNDGF) surged early in Friday’s trading session amid speculation that MGM Resorts International (NYSE: MGM) is mulling a takeover of the Swedish gaming company.

The Kindred Group logo on the side of its offices
The Kindred Group logo on the side of its offices. Rumors resurfaced that MGM and others want to buy the company. (Image: Kindred Group)

Referencing a Betaville alert, which cited unidentified sources with knowledge of the matter, Seeking Alpha ?reported Kindred could be a target of MGM and an unnamed UK-based gaming entity. Regarding which UK company could make a run at Kindred, sources believe the logical choices are FanDuel parent Flutter Entertainment (OTC:PDYPY) and Entain Plc (OTC: GMVHY).

Entain makes sense due to the company’s recent spate of deal-making. On the other hand, assuming both Entain and MGM are interested in acquiring Kindred, it could create tension between the BetMGM partners. As of yet, neither company has publicly confirmed an interest in Kindred. Nor has Flutter.

Kindred Is On the Block

While there’s ample speculation about what companies could be sensible suitors for Kindred, what’s not up for debate is that company announced in April that’s evaluating strategic alternatives, including a potential sale.

Since then, the NASDAQ Stockholm-listed operator has dealt with the departures of its chief executive officer, chief financial officer, chief gaming officer and chief marketing officer. Despite the C-suite upheaval, Kindred has been a dedicated buyer of its own stock — something analysts view as a possible prelude to a sale.

Speculation of MGM’s interest in Kindred surfaced in May and it makes sense on multiple levels, Keith Meister’s Corvex Management being one of the driving forces behind Kindred considering a corporate action. He’s also a director at MGM.

Additionally, the Las Vegas-based casino giant has a track record, albeit a modest one, of acquisitions in Sweden. Last year, MGM paid $607 million to buy LeoVegas AB.

Likewise, reports surfaced in May that Kindred held early-stage talks with Entain, Evolution AB, and Flutter regarding a transaction.

Kindred Is Affordable

With a market capitalization of $2.59 billion, Kindred is approachable for any number of suitors. The extent to which MGM and Entain pursue Kindred, if at all, could be a source of intrigue because speculation resurfaced that the Bellagio operator could revisit a takeover of its BetMGM partner.

A takeover of Entain would be far more expensive for MGM than acquiring Kindred. The same could be true of buying the Coral owner out of BetMGM.

On the company’s recent second-quarter earnings conference call, Kindred executives confirmed the strategic review is ongoing and that’s progressing as expected. They added that the operator’s near-term focus is on adding market share and containing costs.