Enlabs increases stake in Global Gaming as takeover looms
Nasdaq-listed Enlabs plans to make public offer within four weeks for remaining shares after taking 54% slice of Ninja Casino owner
Baltic-focused operator Enlabs has snapped up 9,878,086 shares in Global Gaming 555 AB for SEK11 per share (94p), taking its holding from 29.89% to 54.06%.
The share purchase, which will be paid half in cash and half by issuing new shares in Enlabs, values Global Gaming at up to SEK450m (£38m).
With the acquisition of these new shares and by assuming a majority stake in Global Gaming, Enlabs is obliged within four weeks to tender a public offer for the remaining shares – a so-called mandatory public offer referred to as ‘budpliktsbud’ in Swedish.
Enlabs intends to make that offer, with shareholders in Global Gaming allowed to transfer their shares to Enlabs against a consideration corresponding to SEK11 per share in Global Gaming.
This is approximately 34% above the average trading price for Global Gaming shares during the last 90 days of trading, Enlabs said. The consideration will not be increased, the operator added.
In June, Enlabs became the largest shareholder in Global Gaming by doubling its stake to almost 30% with the purchase of 11.3 million shares for SEK90.4m.
In a note on Enlabs increasing its stake, analyst firm Redeye said the move was expected and that the premium is attractive, indicating that Enlabs “sees substantial synergies as well as potential”.
Redeye said the SEK11 per share offer values Global Gaming at SEK450m, corresponding to an enterprise value of around SEK360m, meaning that, based on its estimates, this gives an enterprise value-to-sales multiple (EV/S) of around 1.3x.
“The EV/S multiple is on a par with peers like LeoVegas and Kindred, but these companies are considerably larger and less risky than Global Gaming.
“Furthermore, the EV/S multiple is well above the sales multiple of 0.7x that Betsson acquired GiG’s B2C segment for earlier in 2020. The offer also comes in between our base case of SEK8.5 and bull case of SEK12, which is indicating that the offer is attractive.”
Enlabs revealed last week that its Q2 revenue tumbled 35% to €6.1m due in part to Latvia’s suspension of all licences earlier this year due to the coronavirus lockdown in the country.
Meanwhile, Global Gaming announced this week that it is diversifying its revenue streams by expanding its Ninja brand in sports betting.
Enlabs share price rose 2.17% in early trading while Global Gaming’s stock was up almost 15%.