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Entain Allegedly Stakes $1 Billion in OEG Takeover Bid
By Shane Addinall Nov 23, 2021 IndustryReports of a possible Entain bid to acquire Olympic Entertainment Group has the gambling industry buzzing. The $1 billion take over would position Entain as the industry leader in Eastern Europe.Rumours buzz about the reports that Entain seeks to gain the Baltic-facing casino and sportsbook operator, Olympic Entertainment Group (OEG). Numerous sources report that the British gambling company intends to buy OEG and, according to Bloomberg, an offer of $1 billion is on the table.
Neither company made any public statements to confirm or deny the reports, but the alleged deal would make Entain the market leader in the Baltics. Familiar brands owned by the Nasdaq Tallinn listed company are OlyBet and MaxBet.
Ready For the Best Suitor
In March 2018, the London-based private equity firm, Novalpina Capital, bought OEG for €288.4 million from its founder, Armin Karu and his partner, Jaan Korpusov. In July of this year, Novalpina lost control of the €1 Billion private equity fund. An investor vote stripped Novalpina of its management duties and Berkeley Research Group is in the process of taking over. The Bloomberg report mentioned that Entain has several strategies they can use to structure the deal.
Olympic owns a list of brick-and-mortar casinos and online gambling platforms throughout Eastern Europe. With more than a hundred casinos and almost two dozen sport betting facilities situated in Estonia, Latvia, Lithuania, Slovakia, and Italy, it is the largest opposition to Optibet, now owned by Entain.
Formerly, Optibet functioned within Enlabs AB, a Swedish igaming company but, Entain gained it through a €370 million purchase. Entain originally offered Enlabs SEK 40 per share, which they later withdrew. In March they tabled an offer of SEK 53 per share which was accepted by 94% of the company’s shareholders.
Olympic has a workforce of approximately 2,800 people and its annual turnover exceeds $40 million. They are also the NBA’s official betting partner in several places and basketball is the number one sport in the north-eastern parts of Europe. OlyBet is OEG’s flagship sportsbook within the Baltic Region.
Sources say the speculated deal may include terms that will incorporate an upfront fee to OEG for Entain to take ownership of their online platforms in Lithuania and Croatia. The land-based businesses will only go under acquisition option in 2023. Reports indicate the latter will receive a cash-flow boost with the condition of a revised creditor structure.
Entain in an M&A Dance With MGM
The FTSE 100 company may be in an acquisition bid of their own with MGM Resort. The sports betting and gambling company declined an $11 billion bid from their US betting partner. Barry Gibson explained that because the company undervalued Entain’s prospects, the bid committee refused to put the offer forward to stakeholders.
DraftKings shelved their £28 per share offer made mid-year. The proposition roughly valued Entain at £18 Billion (approximately $24 billion) and igaming industry analysts speculate on what MGM’s reassessment will look like. This may well be the most critical year-end for Entain as they expect MGM’s adjusted bid to surface any time soon.
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