Kindred Group, the Swedish gaming company, saw its shares surge in a recent trading session due to speculation that MGM Resorts International is contemplating a takeover.
This surge, however, was short-lived as the gains were soon wiped out.
Potential Suitors for Kindred
According to a Betaville alert, which cited anonymous sources, Kindred could be a target for MGM and an unnamed UK-based gaming entity. When it comes to the potential UK company that might bid for Kindred, industry insiders believe that the logical contenders are FanDuel’s parent company, Flutter Entertainment, and Entain Plc.
Entain’s interest in Kindred seems plausible given the company’s recent flurry of deal-making activities. However, if both Entain and MGM express interest in acquiring Kindred, it could potentially create friction between the BetMGM partners. As of now, neither company has publicly confirmed an interest in Kindred, and neither has Flutter.
Kindred Open for Strategic Alternatives
While there’s plenty of speculation about potential suitors for Kindred, it’s clear that the company announced in April that it’s evaluating strategic alternatives, including a potential sale.
Since then, Kindred, listed on NASDAQ Stockholm, has seen the departure of its CEO, CFO, Chief Gaming Officer, and Chief Marketing Officer. Despite the executive-level changes, Kindred has consistently been buying its own stock, a move analysts interpret as a possible precursor to a sale.
Why MGM’s Interest in Kindred Makes Sense
Speculation about MGM’s interest in Kindred first surfaced in May, and it seems logical for several reasons. Keith Meister’s Corvex Management is one of the key forces pushing Kindred to consider a corporate action, and Meister also serves as a director at MGM.
Moreover, MGM has a history, albeit a modest one, of acquisitions in Sweden. Last year, MGM shelled out $607 million to acquire LeoVegas AB.
In May, reports also emerged that Kindred had preliminary discussions with Entain, Evolution AB, and Flutter regarding a potential deal.
Affordability of Kindred
With a market capitalization of $2.59 billion, Kindred is within reach of several potential buyers. The extent to which MGM and Entain pursue Kindred could be intriguing, as speculation has resurfaced that the Bellagio operator might reconsider a takeover of its BetMGM partner.
Acquiring Entain would be significantly more expensive for MGM than purchasing Kindred. The same could be true if MGM decides to buy the Coral owner out of BetMGM.
During the company’s recent second-quarter earnings conference call, Kindred executives confirmed that the strategic review is ongoing and progressing as expected. They added that the operator’s near-term focus is on increasing market share and reducing costs.
Kindred, as a group of brands, is best known for its collection of online casino platforms.