FDJ moves on €2.6bn all cash acquisition of Kindred

 Groupe FDJ has outlined its ambitions to create a “new European gaming champion” by launching a €2.6bn all cash tender offer to acquire Kindred Group Plc outright. 

The Paris Euronext exchange was informed this morning of FDJ’s opening offer to acquire Stockholm-listed Kindred Group, putting forward a SEK 130 (€11.40) per share offer to the firm’s board. 

As detailed by FDJ’s filing, the offer “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 €2.6bn”.

Kindred investors were notified of FDJ’s plans to form a newly merged European lotteries, gaming and sportsbook powerhouse, that would instantly become Europe’s “second-largest operator in the gaming sector”.

The strength of FDJ’s approach was underlined as the offer has been “unanimously recommended by Kindred’s Board of Directors” and “five key shareholders holding a combined 27.9% of the capital irrevocably support FDJ’s deal and terms”.

Should the deal secure unanimous shareholder approval, FDJ will launch its all-cash tender on 19 February 2024, beginning a nine-month period to complete its takeover of Kindred, subject to regulatory authorisations.

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.

“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.”

The Paris Euronext was informed that FDJ “will refinance a bridge loan on market terms” to finance its €2.6bn cash offer, and aims to maintain long-term net debt EBITDA ratio of 2x.

Shareholders will be provided a prospectus of how FDJ and Kindred will merge its proprietary technology systems to benefit the operations and co-synergies of a new multi-market European gaming group, operating in 100% regulated markets of France, Sweden, the Netherlands, the UK, Ireland and Belgium.

Ahead of the deal, Kindred reaffirmed its target for 2023 trading, generating gross-win revenues of £1.17bn, combined with an underlying FY2023 EBITDA of £205m for year trading.

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.”