FDJ’s impact on Kindred employees and market departures

Lea Hogg 2 months ago
FDJ’s impact on Kindred employees and market departures

The Board of Kindred Group has confirmed to its employees that it does not intend to make any major changes in operations.

Business as usual for employees of both entities

Currently no decisions have been made regarding any substantial changes to Kindred’s or FDJ’s employees, management, organization, operations, employment terms, and business locations.

“As Kindred employees, you are valued, and your contributions are recognized.”

The Board of Kindred Group plc

The message effectively conveyed that standard operations in the Malta-based offices will continue for the Kindred employees. 

SiGMA News received information from employees who chose to remain anonymous, indicating that, despite generous redundancy packages offered to selected Kindred employees at the end of last year, those working in Kindred’s Malta-based office are currently expressing a sense of relief.

Future of employees and exit of Norwegian and unregulated markets

Upon assessing FDJ’s offer and its implications on employment, Kindred asserted to employees that FDJ has no plans for significant changes. In a communication from FDJ to Kindred employees, the company stated “we will navigate through these transformations. Your steadfast dedication and commitment continue to be indispensable to FDJ’s ongoing success.”

In its press release FDJ also expressed its appreciation for the skills and talents of Kindred’s employees and stated that the company intends to maintain an excellent relationship with them.

However FDJ plans to exit the Norwegian market and other non-regulated markets that have no strategy to become regulated.

FDJ’s conditional offer

FDJ’s offer to buy Kindred’s shares is subject to several conditions. The deal will only go through if two conditions are met. First, FDJ needs to acquire more than 90 percent of Kindred’s shares. Second, they need to get approval from all relevant government and regulatory bodies, and these approvals must be on terms that FDJ finds acceptable.

Cash offer for Swedish Depository Receipts

Kindred’s most recent statement is in accordance with Rule II.19 of the Nasdaq Stockholm Takeover Rules. The board of Kindred, assisted by financial advisors and taking into consideration growth prospects and associated risks, has unanimously recommended shareholders to accept the public cash offer from FDJ of SEK 130 per share.

FDJ has announced a recommended public cash offer to the holders of Swedish Depository Receipts (SDRs) in Kindred.

  • Offer price: SEK 130 per SDR.
  • Total offer value: SEK 27,951 million.
  • Premium of 24.4 percent over the closing share price on 19 January 2024.
  • Premium of 34.9 percent over the average trading price of the last 30 days.
  • Premium of 36.3 percent over the average trading price of the last 90 days.
  • Premium of 40.1 percent over the closing price on 28 November 2023.

The acceptance period: 20 February 2024 to 19 November 2024.

Role of Kindred’s board of directors

The Board of Kindred Group plc is a diverse group with various responsibilities. Two of the board members, James Gemmel, (photo above on right), and Cédric Boireau, (photo above on left),represent shareholders on Kindred’s Board of Directors who have committed to accepting the offer.

These shareholders are activist hedge fund Corvex Management and Premier Investissement. However, due to a conflict of interest, these two board members have not participated in the Board’s handling of or decisions concerning matters relating to this offer.

Kindred has a total of 215,008,190 outstanding shares, excluding 15,117,946 treasury shares held by the company itself. If Kindred decides to pay any dividend or make any other value transfer before the settlement of the Offer, the price per share in the Offer will be adjusted accordingly.

In 2023, Kindred reported an underlying EBITDA of £205 million. This figure does not include any treasury shares held by Kindred, which currently amount to 15,117,946.

Several of Kindred’s shareholders have committed to accepting the Offer and voting in favour of an amendment of the articles of association. These shareholders include Corvex Management LP, which holds 16.6 percent of the shares, Premier Investissement SAS with 4 percent, Eminence Capital with 3.5 percent, Veralda Investment with 2.3 percent, and Nordea with 1.5 percent. These commitments apply regardless of whether a higher competing offer is made.

From disruptor to leader in online gaming

Kindred, established in 1997, revolutionized the betting industry with its customer-centric approach and innovative technology. Over 25 years, it has grown into a leading online gambling operator, serving 30 million customers across nine brands. Kindred’s success is attributed to its continuous investment in technology, products, and people. The company’s strong profitability and cash flow generation are testament to its effective business model. The Unibet brand, part of Kindred, dominates European markets with stable regulated revenues.

The Board, considering the company’s 2024 guidance and long-term growth prospects, has taken into account various factors including market competition, potential regulatory changes, and the company’s ability to deliver shareholder value.

This offer, comprising cash consideration, provides shareholders an opportunity to realize their investment value.

Morgan Stanley among M&A advisors

A team of financial advisors and a legal advisor have been appointed. Representing Kindred, the financial advisors include PJT Partners, Morgan Stanley, and Canaccord Genuity Limited, while White & Case serves as the legal advisor.

Additionally, the Board has commissioned Jefferies GmbH to provide a fairness opinion on the offer price from a financial perspective. This opinion, which is attached to this statement, is provided for a fixed fee that is not dependent on the offer size, acceptance level, or completion status.

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