Offer represents a 16% premium, and is all but confirmed with Kindred securing 71% of votes
Swedish online gaming firm Kindred Group has agreed a £175.6m takeover with the board of 32Red, it was announced on Thursday.
The boards of Kindred and 32Red said they were pleased to announce that an agreement had been reached for a recommended cash offer for Kindred to acquire the entire share issue of 32Red for 196p, a 16% premium on Wednesday's close.
32Red shareholders, who hold stock on the 3 March, will also receive a second interim dividend per 32Red Share of 4p, taking the actual offer to 200p. Hence why 32Red shares opened at £2 this morning, rather than 196p.
The offer values the firm at roughly £175m, not bad considering that just two years ago it was trading at 35p (c.£30m)
Whilst a 16% premium looks modest, considering the rapid rise in the company's share price since January, it seems fair:
The offer represents:
- 16.3% premium on Wednesday's closing price of 172p
- 32.4% premium on the average price of 151.1p in the month prior to the date of this announcement
- 39.5% premium on the average price of 143.4p in the three months prior
- 42.5% premium on the average price of 140.3p in the six months prior
32Red was advised by its broker, Numis, that the terms of the offer were fair and reasonable, and the Directors unanimously agreed to recommend that 32Red shareholders accept the offer.
The Company's directors hold a 43% voting stake in the company, and Kindred has received irrevocable undertakings from an additional 27.8% of the share register, making the deal almost certain:
"Accordingly, Kindred has received irrevocable undertakings to accept (or procure acceptance of) the Offer in relation to an aggregate of 60,701,232 32Red Shares, representing approximately 71.1 per cent. of the share capital of 32Red in issue on 22 February 2017 (being the latest practicable date prior to the publication of this announcement)."
Speaking about the offer, 32Red chief Ed Ware said he was looking forward to joining forces with Kindred, whose management have a similar business philosophy, whilst Henrik Tjärnström from Kindred said the acquisition was consistent with his firm's multi-brand strategy and desire to grow its business in regulated markets:
"32Red is a high quality, customer-focused business with a similar culture to Kindred's and we are delighted to welcome 32Red and its team into the Kindred Group and look forward to further developing the brand going forward."