UK-based gaming companies and MGM could potentially be considering a takeover of Kindred Group.
Although the gains have disappeared, shares of Kindred Group (OTC: KNDGF) rose significantly during Friday's trading session due to speculation that MGM Resorts International (NYSE: MGM) might consider taking over the Swedish gaming company. There were rumors that not only MGM but also an unknown British gaming company were considering Kindred as a potential target. The possible contenders for the UK-based company are believed to be FanDuel's parent, Flutter Entertainment (OTC: PDYPY), and Entain Plc (OTC: GMVHY).
It's worth noting that if both Entain and MGM were interested in Kindred, it could create a lot of tension between the BetMGM partners. But neither company has officially declared their interest in Kindred yet, neither has Flutter.
Kindred is for sale
It's clear that Kindred is looking for buyers, as they announced in April that they were considering various strategic alternatives, including a possible sale. Since then, there have been some interesting developments. Their CEO, CFO, CGO, and CMO have all left the company. Despite these high-level departures, Kindred has been actively buying back its own shares, which analysts see as a potential indication of a forthcoming sale.
There have been whispers of MGM's interest in Kindred since May, and it makes sense given that Keith Meister's Corvex Management is pushing Kindred to consider a corporate action, and he's also a director at MGM. It's worth noting that MGM has made some smaller acquisitions in Sweden in the past, such as the $607 million purchase of LeoVegas AB last year.
Reports from May also suggested that Kindred had preliminary talks with Entain, Evolution AB, and Flutter regarding a potential transaction.
Kindred is a good deal
Kindred is an attractive prospect for potential buyers because it has a market capitalization of $2.59 billion, making it an affordable option for many. The situation becomes more interesting if MGM seriously considers acquiring Kindred or if Entain also joins the fray. This might bring renewed questions about MGM's intentions towards their current BetMGM partner.
If MGM were to take over Entain, it would be considerably more expensive than acquiring Kindred. The same can be said about a potential buyout of the Coral owner from BetMGM.
During their second-quarter earnings call, Kindred executives confirmed that the strategic review is still ongoing and that it's proceeding as expected. They also mentioned that their short-term goal is to increase their market share and cut costs.
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Source: www.casino.org
