Enlab investors reject Entain’s £250m bid

Entain’s £250m bid to acquire the Baltic-facing operator Enlabs rejected by investors holding 10.7% in the company

The European iGaming giant has announced its offer to acquire Baltic-facing Optibet operator Enlabs for SEK2.80bn (£250m/€276.4m/$340.1m). Entain has valued Enlabs shares at SEK40, approximately a 15.6% premium of its volume-weighted average price just 90 days before hand. Enlabs shareholders holding a 10.7% stake in the company, however, have rejected the offer as they believe it undervalues the company. 

Shareholders that own 10.7% of Enlabs have criticised the offer, saying it “materially undervalues” the company. Alta Fox Capital Management, currently representing 3.34% of total shares, have rejected the bid with support from minority shareholders like Topline Capital and private investors such as Jimmy Jonsson, Hans Isoz, and Ludwig Pettersson. Alta Fox proposed an alternative offer, which they deem more appropriate, of SEK55 per Enlab Share.

Alta Fox shared

Alta Fox confidently believes we have the support to block a squeeze-out of minority shareholders, legal counsel to ensure their fair treatment under Swedish law, and the determination to obtain a fair price that is reflective of Enlabs’ standalone growth prospects.

In an PR, Entain, formerly known as GVC Holdings plc, stated:

In a highly competitive and regulated industry, Entain believes scale and diversification is essential to continue to create shareholder value

Entain places great value on Enlabs’ organization and, by leveraging Entain’s scale, proprietary technology, marketing skills and products, will drive further growth in order to create long-term positive effects for Enlabs employees and other stakeholders.

The acquisition of Enlabs represents a synergistic combination with a preeminent operator, with high operating standards and a market-leading customer proposition.

Entain commented on the strategic move in bid to break into the Baltic region:

“The Baltic region represents a highly attractive, locally regulated and fast-growing gaming market. Entain does not currently operate in these geographies and entry is aligned with Entain’s strategy to focus on growth markets which are locally regulated and taxed. 

The news comes as Entain Plc is in talks to appoint a new CEO following the sudden departure of Shay Segev, pursuing a role with higher financial rewards at DAZN sports streaming site. Sources report that Entain Plc are in ‘advanced discussions’ to appoint Jette Nygaard-Andersen as their new chief executive officer, making her the first female CEO for any British-listed gambling group.

Just last week, the £8.09 billion ($11 billion) takeover battle with MGM and Entain took a left turn as Entain’s CEO Shay Segev quit. In addition, Entain’s largest shareholders were already skeptical of the takeover, deeming the £8.1bn proposed undervalued the company. Now, Entain’s market cap fell sharply by 12.5% to £7.3bn causing its value to plummet by almost £1bn after MGM dropped out. 

Source: iGaming Business 

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