The world domination plans of MGM Resorts know no bounds, and the Scandinavian market could be next on their hitlist after they made a $607 million (£483 million) bid for LeoVegas.
The American firm is very keen to increase its European audience, and their offer for the Swedish brand prices it at $6.20 per share – far in excess of the $4.30 that LeoVegas stock was trading in prior to news of the takeover bid being made public.
If the deal is given the green light by shareholders, MGM would take control of LeoVegas’ eight licences in jurisdictions across mainland Europe and the Nordic region, and enjoy the fruits of the firm’s successes which include annual revenue in the region of €393 million.
A statement released by MGM Resorts confirmed the bid and suggested that the takeover would afford the company a ‘unique opportunity’ to accelerate growth and enhance their product portfolio outside of the US, while tapping into the knowledge and skillset of LeoVegas’ management team – many of whom would likely be retained by MGM post-merger.
And, of course, in an industry fixated with numbers, LeoVegas’ impressive profitability – they have enjoyed annual growth of around 16% year-on-year since 2017 – is the icing on the cake.
Bill Hornbuckle, the CEO of MGM Resorts, said:
“We have achieved remarkable success with BetMGM in the US, and with the acquisition of LeoVegas in Europe we will expand our online gaming presence globally.
“We believe that this offer creates a compelling opportunity that allows the combined teams of MGM Resorts and LeoVegas to accelerate our global digital gaming growth.”
MGM had previously based their plans for international expansion around a bid for Entain, the European behemoth that owns brands like Party Casino, Gala Bingo and Coral, however that hit the skids when Entain’s shareholders claimed the offer ‘substantially undervalued’ the true worth of the company.
Resistance is Futile
LeoVegas will now have until the end of August to accept the offer should shareholder approval be forthcoming, and already the wheels are in motion with the operator’s key personnel reportedly ready to sell up.
A press release on their website, addressed to shareholders but publicly available, confirms that their board of directors ‘unanimously’ agrees that accepting the offer is the right thing to do, having made steps to sound out other potential offers from a variety of different suitors.
“In its evaluation of the offer, the Board of Directors has taken a number of factors into account. These factors include, but are not limited to, the company’s present strategic and financial position, and the company’s expected potential future development and thereto related opportunities and risks.
“The Board of Directors notes that the offer represents a premium of approximately 44.1% compared to the closing price of SEK 42.32 of the company’s share on Nasdaq Stockholm.
“MGM’s offer is, in the assessment of the LeoVegas Board of Directors, the superior offer from the perspective of the shareholders. Based on the above, the Board of Directors unanimously recommends the shareholders in LeoVegas to accept the offer.”