In a decisive move that could reshape the European gaming landscape, Française des Jeux (FDJ) has published a comprehensive public tender document detailing its acquisition bid for online gambling company Kindred. This strategic maneuver, unveiled on February 19, follows FDJ’s January offer which values Kindred at a staggering 27.96 billion Swedish Krona (approximately £2.12 billion/€2.49 billion/$2.68 billion).
FDJ has proposed an alluring price tag of SEK130 per Swedish Depository Receipt (SDR) to acquire Kindred, marking a 24.4% premium over the Kindred share price of SEK104.50 at market close on January 19, preceding any public awareness of the forthcoming proposition. The offer has been positively ratified by the Kindred board, recommending shareholders to embrace the deal, with the FDJ board similarly endorsing the takeover.
Shareholders are on the cusp of making a critical decision, as the acceptance period for this offer is set to commence on February 20 and extend until November 19. However, if regulatory approvals are clinched ahead of schedule, this window may close sooner, with FDJ projecting an initial settlement date as early as November 28, pending fruition of the necessary requirements.
FDJ’s chief executive officer and chair, Stéphane Pallez, extolled the alliance as one forging a formidable entity, characterizing it as a “European gaming champion” set to bolster revenue and earnings expansion. Pallez heralded Kindred’s market-leading position, brand potency, technological proficiency, and commitment to responsible gaming as synergistic complements to FDJ’s vision and value creation strategy for stakeholders.
Echoing Pallez’s sentiments, Kindred CEO Nils Andén underscored his conviction that the union will energize growth and fast-track strategic initiatives. Andén also envisaged the merger’s role in reinforcing their quest for operations predominantly in regulated markets.
Industry analysts, such as H2 Gambling Capital’s senior analyst Ed Birkin, view FDJ’s move as groundbreaking, pointing to the firm’s past endeavours including acquisitions of ZEturf and Premier Lotteries Ireland. Birkin deems Kindred’s portfolio – especially its igaming segment, which generates 60% of its revenue – as a dynamic shift in FDJ’s strategy, granting new market access while reinforcing its footprint in France’s competitive online gambling market.
The industry buzz heightened shortly after the acquisition bid announcement as both FDJ and Kindred divulged their financial performances for 2023. FDJ, France’s leading gaming operator, reported a 6.5% increase in revenue, totaling €2.62 billion—a figure corroborated by their fully detailed financial results. The operator also notched up significant growth, with an 11.3% rise in earnings before interest, taxes, depreciation, and amortization (EBITDA) to €657 million and a remarkable 38.0% surge in net profit to €425 million.
While Kindred also forecasted an uptick in revenue, it unveiled mixed full-year results. The online gaming company witnessed a substantial jump in revenue by 13.3% to £1.21 billion, the majority hailing from business-to-business operations. Nevertheless, it grappled with rising costs, net profit plummeted by 60.7% to £47.2 million for the year. In contrast, underlying EBITDA painted a brighter picture, escalating by 58.3% to reach £204.5 million.
As this takeover unfolds, the industry is left pondering the potential implications. The melding of FDJ’s enduring legacy with Kindred’s pioneering sphere could signal the dawn of a new epoch in European gaming—an era where digital integration and market dominance set the precedents for future mergers and acquisitions.
