- In order to implement its ambition to become an
international gaming operator, FDJ is announcing the filing of a
tender offer to acquire the entire share capital of Kindred
- Kindred is one of Europe's leading online betting and gaming
companies, operating the Unibet brand
- The offer is being made at a price of SEK 130 per share in
Kindred, which is listed on Nasdaq Stockholm
- This price represents a premium of 24% over the closing price
on 19 January 2024 and 35% over the weighted average price for the
last 30 trading days, and corresponds to an enterprise value of
€2.6 billion
- This acquisition will create a European gaming champion with
an enhanced financial profile
- Second-largest operator in Europe's gaming sector
- Stronger revenue and earnings growth
- FDJ and Kindred share high standards for responsible gaming
and a business model that combines performance and
responsibility
- The combined Group will only operate on markets that are
locally regulated or on the path of becoming regulated
- This transaction will create value for FDJ shareholders. In
particular, it is expected to lead to a more than 10% accretion in
dividend per share, starting from the 2025 financial year to be
paid in 2026
- This offer is unanimously recommended by Kindred’s Board of
Directors
- Five key shareholders, holding a combined 27.9%1 of the
capital, have irrevocably undertaken to support the transaction and
tender their shares
- The transaction will take the form of an all-cash tender offer,
which will be launched on 19 February 2024 for a maximum period of
nine months. The completion of the tender offer remains subject to
regulatory authorisations and to FDJ's acquisition of at least 90%
of Kindred's capital
Stéphane Pallez, Chairwoman and CEO of FDJ Group, said:
“I am pleased to announce today the proposed acquisition of
Kindred. Fully aligned with our strategy, it will give the Group a
diversified and balanced profile, based on several pillars: the
monopoly activities, mainly the lottery, on our French historical
market and, since November, in Ireland, with the acquisition of the
Irish lottery operator PLI; and online sports betting and gaming
activities open to competition in Europe. In this market, Kindred
is one of the leading operators, combining strong brands,
best-in-class technology platforms, an attractive growth profile
and a committed approach to responsible gaming. Given their
respective histories, strategic strengths and core values, FDJ and
Kindred are highly complementary, and I will be delighted to
welcome Kindred's management team and many talented individuals
into the combined Group following this transaction. The combination
will result in a stronger strategic positioning and significant
value creation for the benefit of our shareholders and broader
stakeholders.”
Nils Andén, CEO of Kindred, said: “I’m delighted with
today’s transaction announcement between FDJ and Kindred, creating
a leading European gaming operator with the financial and strategic
capabilities to further expand its global footprint. I believe that
combining with FDJ, Kindred can accelerate the delivery of
long-term strategic projects, continue to grow in core markets, and
provide a trusted source of entertainment to customers. It will
also speed up our path towards 100% locally regulated revenue. I’m
excited to bring Kindred’s extensive experience and know-how into
FDJ’s organisation, contributing to the development of a leading
online gaming business. I’m also very proud that FDJ acknowledges
and values the skilled employees and strong assets within
Kindred.”
Regulatory News:
In order to implement its ambition to become an international
gaming operator, FDJ is announcing the filing of an all-cash tender
offer to acquire the entire share capital of Kindred, a company
listed on Nasdaq Stockholm. This offer is unanimously recommended
by Kindred's Board of Directors.
Kindred, a leading operator in the European online betting
and gaming sector
Kindred is one of Europe's leading online betting and gaming
operators:
- Kindred provides a diversified online offering (sports and
horse-race betting, poker and casinos), including brands such as
Unibet and 32Red.
- With revenue (after betting duties) of £893 million in 2023,
Kindred is one of the top five operators in Western Europe, present
in seven of the top ten European markets, including the
Netherlands, the United Kingdom, France, Sweden and Belgium.
- Kindred has been an online betting and gaming operator for over
25 years and has extensive digital expertise and proven technology
platforms.
The combination between FDJ and Kindred will create a
diversified European champion
This transaction will create a highly digitalised European
champion that is diversified both in terms of its offering and its
geographic footprint:
- The FDJ Group's international presence will expand to account
for approximately 20% of its gross gaming revenue (GGR)2, compared
to 6% currently.
- Online share of GGR will rise from 14% for FDJ to 29% for the
combined Group.
- Kindred's cutting-edge digital expertise and technology
platforms will accelerate FDJ's digitalisation for online
markets.
- The combined Group will offer a wide gaming range on markets
open to competition (online sports and horse-race betting, online
poker and online casinos).
- Online betting and gaming markets open to competition will
account for 19% of the new Group's GGR, versus 2% at present.
- In France, thanks to the acquisition of Unibet, the FDJ group
will become the third largest operator in the online sports betting
and gaming open to competition sector.
FDJ and Kindred share high standards of responsible gaming
and a business model that combines performance and responsibility.
The combined Group will only operate on locally regulated - or on
the path of becoming regulated - markets
FDJ and Kindred deploy the best practices in responsible gaming
and sustainable development in their respective activities. This
will enable the new Group to pursue a growth model that combines
performance and responsibility.
The combined Group will only operate on markets that are locally
regulated or on the path of becoming regulated and plans in
particular to exit the Norwegian market.
FDJ's acquisition of Kindred strengthens the FDJ Group's
financial profile
In 20233, Kindred generated revenue (after betting duties) of
£893 million and recorded EBITDA of £205 million, with an EBITDA
margin on revenue of 23%. Kindred is targeting EBITDA for 2024 to
exceed £250 million4.
The combination of Kindred and FDJ will create a Group that is
significantly more attractive financially, including:
- Accelerated growth in revenues and in free cash flow; accretion
in recurring EBITDA margin - beyond FDJ's standalone target of at
least 25% by 2025;
- A significant increase in the Group’s earnings per share and
earnings growth.
FDJ will finance this acquisition using a large part of its
available cash5 and through a bridge loan with leading French
banks.
The FDJ Group:
- Reiterates aiming a mid-term net debt to recurring EBITDA ratio
of ≤2x;
- Will aim to refinance the bridge loan on attractive market
terms and will target an investment grade rating.
FDJ's acquisition of Kindred will create value for FDJ
shareholders
- The combined Group will benefit from scale, iconic brands and
proven technology platforms.
- The consolidation of Kindred into the FDJ Group will create
tangible value for the Group's shareholders with a more than 10%
accretion in dividend per share starting from the 2025 financial
year to be paid in 2026, based on a distribution rate of 75% of the
Group's combined adjusted net income6, post completion of the
transaction.
An offer unanimously supported by both Boards of
Directors
The tender offer has been supported by both Groups' Boards of
Directors. Kindred's Board of Directors recommends that Kindred's
shareholders tender their shares to FDJ's tender offer.
- FDJ has obtained an irrevocable agreement from five Kindred
shareholders, representing 27.9%7 of the capital, to tender their
shares.
- The offer price is SEK 130 per share, representing an
enterprise value of €2.6 billion based on Kindred's financial
position at the end of 2023.
- The proposed price represents a premium of 24% over the closing
price on 19 January 2024, of 35% over the weighted average price
over the last 30 trading days and of 36% over the last 90 trading
days.
The tender offer will be launched on 19 February 2024 for a
maximum period of nine months, subject to: the usual conditions
precedent for a tender offer on the Swedish market; obtaining
regulatory approvals, in particular from the Swedish Financial
Markets Authority and the French Competition Authority; the
amendment of Kindred's articles of association to allow the
implementation of a squeeze-out procedure in the event of FDJ
acquiring at least 90% of Kindred's share capital; and the
acquisition by FDJ of at least 90% of Kindred's share capital.
A presentation of the project for media and investors is
available on the FDJ Group website: Publications and results - FDJ
(groupefdj.com)
The offer documentation is available in English and in Swedish
on the FDJ Group website:
https://www.groupefdj.com/en/fdj-launches-a-tender-offer-for-kindred-to-create-a-european-gaming-champion/
About FDJ Group
France's leading gaming operator and one of the industry leaders
worldwide, FDJ offers responsible gaming to the general public in
the form of lottery games (draws and instant games), sports betting
(through its ParionsSport point de vente et ParionsSport en ligne
brands), horse-race betting and poker. FDJ's performance is driven
by a large portfolio of iconic brands, the leading local sales
network in France, a growing market, and recurring investments. The
Group implements an innovative strategy to increase the
attractiveness of its gaming and service offering across all
distribution channels, by offering a responsible customer
experience.
FDJ Group is listed on the regulated market of Euronext Paris
(Compartment A – FDJ.PA) and is part of the SBF 120, Euronext 100,
Euronext Vigeo 20, EN EZ ESG L 80, STOXX Europe 600, MSCI Europe
and FTSE Euro indices.
For more information, visit www.groupefdj.com
X: @FDJ Facebook: FDJ Instagram: @FDJ_official LinkedIn:
@FDJ
1 Based on shares outstanding (excluding treasury shares). Corvex
Management LP 16.6%; Premier Investissement SAS 4.0%; Eminence
Capital 3.5%; Veralda Investment 2.3%; Nordea 1.5%.
2 Gross gaming revenue = stakes – player
winnings.
3 Based on data provided by Kindred on 22
January 2024.
4 Kindred's 2024 guidance reflects its
exit from the North American market, but still takes into account
the contribution of non-locally regulated markets such as Norway
and dotcoms in particular.
5 At 31 December 2023, the FDJ Group's net
cash surplus was €671 million - excluding the innovation fund.
6 Net profit before amortisation of Price
Purchase Allocations.
7 Based on shares outstanding (excluding
treasury shares). Corvex Management LP 16.6%; Premier
Investissement SAS 4.0%; Eminence Capital 3.5%; Veralda Investment
2.3%; Nordea 1.5%.
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