Evolution Gaming Enters Bid To Buy NetEnt

By Ben Hamill - June 25 2020
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Evolution Gaming Enters Bid To Buy NetEnt

It’s official: Evolution Gaming has made a formal bid to acquire NetEnt and it’s a super sell unanimously recommended to shareholders by the NetEnt board. It’s a motion that may well be the biggest news of the year so far, but even though surprising, it’s not exactly unexpected either. This is according to Julian Buhagiar, co-founder of private equity and real estate investment and development giant, RB Capital.

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According to the terms of the proposed acquisition deal, Evolution Gaming has bid an offering of 0.1306 shares for each share in NetEnt. And at a present value of SEK 79.93 to a single share, the total value of all shares total to approximately SEK 19.6 billion. Evolution Gaming has furthermore indicated that it will not be increasing the consideration value on offer. The offer represents an average premium of around 43% when compared to the closing price of a single NetEnt share on Nasdaq Stockholm (Sweden) as on June 23.

This is in itself a strong indication not only of Evolution’s intentions of finalising the deal as soon as possible by minimising the risks associated with objections lodged by shareholders, but also a clear indication of the direction in which the general market is heading.

Slots Vs Live Casino

A strong focus on consolidating slots alongside a moving away from an absolute focus on live casino offerings may according to Buhagiar, be the main driver behind the proposed acquisition deal. And since NetEnt owns some of the best performing slots in the industry today, Evolution’s decision to offer to acquire is perfectly in line with market expectations.

A shift in the direction of consolidating slots is obviously not without its own risks, especially during a time of (many would argue excessive and completely unnecessary) nearly obsessive market regulation on slots with an above-industry standard profit margin.

The Remaining Nitty-Gritties

The finalisation of the deal obviously remains subject to the usual conditions associated with acquisitions of this nature. Conditions include regulatory clearances, antitrust permissions and particular to the negotiations at hand, that Evolution Gaming ultimately becomes the new owner of at least 90 percent of the total number of outstanding shares.

As for shareholder support, it certainly appears as if Evolution’s average premium “carrot before the nose” strategy has paid off. Shareholders controlling 21.02% of all shares alongside 45.02% of all votes in NetEnt have officially undertaken to accept Evolution Gaming’s offer to buy. What’s more, a section of the board controlling nearly 9% of all shares and at least 23% of all votes in the potential seller, have expressed an intention to accept the offer officially on the table.

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