FDJ tables £2.1bn bid for Kindred Group

Estimated read time 5 min read

French operator sets sights on international and online growth as activist investors give backing to multi-billion-pound deal  

La Française des Jeux (FDJ) has tabled a £2.1bn cash offer for Kindred Group in what would represent one of the largest M&A moves in industry history.

The bid from the French operator represents a multiple of 10.9x Kindred’s 2023 underlying EBITDA.

The offer values Kindred Group at a price of SEK130 (£9.78) per share, which is a 24.4% premium on the closing price of SEK104.5 on Friday 19 January.

The offer also represents a huge 40.1% premium on Kindred’s closing share price of SEK92.80 on Tuesday 28 November, which was the last trading day before the release of its Q3 results.

Kindred’s share price has soared more than 16% in early trading on the Nasdaq Stockholm to SEK122 following the bid.

Kindred Group confirmed that the acceptance period for the offer will begin on or around 20 February and is due to expire on or around 19 November.

Kindred also confirmed that FDJ had received “irrevocable undertakings” from shareholders representing 27.9% of stock in the group.

These investors include Corvex Management, the hedge fund which had pushed for a strategic review back in 2022, and Entain activist investor Eminence Capital.

Veralda Investment, Nordea and Premier Investissement have also given their backing to the bid.

FDJ said that if it were to acquire Kindred, the newly combined group would only operator in regulated or regulating markets, with plans to exit Norway already being confirmed publicly.

FDJ, which acquired Premier Lotteries Ireland last year for €350m, added that the move will create a “highly digitalised European champion that is diversified both in terms of its offering and its geographic footprint”.

The French firm said online share of GGR would jump from 14% to 29% following the transaction.

International operations for FDJ would also soar in terms of GGR share from 6% to 20%.

However, FDJ also noted that thanks to Unibet’s French presence, the acquisition would make the combined business the third largest in France.

Regulus Partners said Unibet’s market share stands at c.12%, and combined with FDJ’s c.11% would create a near hold on a quarter of the market.

This would still put the group behind market leaders Betclic and Winamax.

Stéphane Pallez, FDJ CEO, said both businesses were “highly complementary” as she talked up the potential for future success.

She 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.

“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,” she added.

Nils Andén, Kindred Group interim CEO, commented: “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.”

The offer from FDJ should usher in the close of Kindred’s strategic review which was started in April 2023.

The review’s original MO included the whole or partial sale of the business, or a merger, with management stating in Q3 2023 that a “third-party transaction” would be the optimum way to realise shareholder value.

As part of the strategic review, Kindred is due to pull out of North America by the end of Q2, as well as cut headcount by 300 people in an effort to realise annualised cost savings of £40m.

In a statement, Kindred’s board of directors said that following a “careful and exhaustive evaluation”, the bid from FDJ represented the “most attractive outcome for shareholders of Kindred of the strategic review”.

The board said: “The board believes that the terms of the offer recognise Kindred’s long-term growth prospects, taking into account the risks and uncertainties associated with the realisation of those prospects. The board therefore unanimously recommends the shareholders of Kindred to accept the offer.

“Based on FDJ’s current operations and the current regulatory environment, FDJ does not intend to materially alter the operations of Kindred following the implementation of the offer, other than the exit from the Norwegian market and those other non-regulated markets with no ongoing path to regulation.

“Other than relating to such exit, there are currently no decisions on any material changes to Kindred’s or FDJ’s employees and management or to the existing organisation and operations, including the terms of employment and locations of the business. The board assumes that this description is correct and has no reason to take a different view in this respect.”


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