Stocks Tracker: Dutch doubt and takeover talk shakes key share prices

Kindred Group

1 September closing: SEK162.60

30 September closing: SEK132.45

Peak September closing: SEK167.60

Dutch drama this month saw Kindred Group perform a U-turn to cease to offer its services to consumers in the newly regulated Netherlands market, despite initially planning to plough ahead without a licence.

The Unibet operator confirmed to EGR on Thursday 30 September that it would continue to accept Dutch players despite not being included in the first set of 10 operators to receive a licence.

This surprise approach wasn’t well received by the market, which in the week leading up to the legalisation of the market in the Netherlands (Friday 1 October), saw Kindred’s share price plunge from SEK163.30 on Friday 24 September to SEK141.70 on Wednesday 29 October.

The initial decision to forgo the licensing requirements in the Netherlands saw the stock dip once again to a monthly low of SEK132.45 on Thursday 30 September.

However, Kindred reversed their decision within 24 hours, electing to block Dutch players and with the operator anticipating a negative EBITDA impact of approximately £12m per month as a result.

Entain

1 September closing: 1,978p

30 September closing: 2,130p

Peak September closing: 2,377p

Entain’s share price was buoyed by a shock takeover approach worth $20bn (£16.4bn) from US gambling giant DraftKings in September as the FTSE 100 operator became subject to another US assault.

The bid, valued at £28 per share, caused Entain’s shares to skyrocket on Tuesday 21 September to close at 2,261p, having reached a record high of 2,490p during trading from Monday 20 September’s close of 1,915.50p.

This also caused the operator’s market cap rise to above £14bn.

The Entain board said: “The board of Entain will carefully consider the proposal and a further announcement will be made as and when appropriate. Shareholders are urged to take no action at this time.”

DraftKings’ offer for Entain came just nine months after the Ladbrokes and Coral operator rejected an £8.1bn takeover bid from MGM Resorts, its joint venture partner in the US via BetMGM.

Entain’s share price slipped slightly throughout the remainder of the month following the giddy heights of the DraftKings bid, ending the month at 2,130p, but still well above the pre-DraftKings bid peak price of 1,956p (Friday 17 September).

Elsewhere, Entain confirmed it would pull out of the Netherlands as the market regulates to aid its official licence application in Q4 2021.

Updating investors, Entain guided its withdrawal from the market would cost the business approximately £5m in EBITDA per month.

Entain has also pledged to submit its Dutch licence application by the end of this year and hopes to be awarded a licence by the KSA in the first half of 2022.

Betsson AB

1 September closing: SEK83.13

30 September closing: SEK72.80

Peak September closing: SEK89.57

Boardroom politics towards the end of the month sent Betsson’s stock tumbling as an attempted coup following the unceremonious departure of CEO Pontus Lindwall rocked the Stockholm-listed operator.

Lindwall was given his marching orders on Friday 17 September by chairman Patrick Svensk, bringing an end to his four-year tenure in the top job.

The following week saw the market react, with the share price closing out at SEK87.49 on Monday 20 September after closing on Friday 17 September at SEK89.57.

However, just a few days later on Thursday 23 September came the shock announcement that Svensk was stepping down as chair to be replaced by Johan Lundberg. The news saw Betsson’s share price slip from SEK89 on Wednesday 22 September to SEK85.87 on Thursday 23 September.

The stock market became even more volatile heading into the final week of the month, as the attempted coup came to light.

Four key shareholders, including Pontus Lindwall’s mother, called for an extraordinary general meeting to demand the addition of Lindwall and Peter Hamberg as new board members, despite Lindwall being axed as CEO.

The quartet also called for exclusion of the newly nominated chair Lundberg from the board’s nomination committee, despite him effectively serving as its main convener in his capacity as chair.

From Friday 24 September when the stock market closed at a price of SEK85.58, the reopening of the market on Monday represented a massacre. Betsson’s share price plummeted to SEK78.05 on Monday 27 September and continued to fall for the remainder of the month, bottoming out at SEK72.50.

The fact that Betsson confirmed it would close its operations in the Netherlands to abide with the newly regulated market did little to alleviate the impact the politics wrangling had had on the group’s share price.

Scientific Games

1 September closing: $72

30 September closing: $83.07

Peak September closing: $84.11

Scientific Games’ share price showed a late month bloom following the sale of the supplier’s OpenBet subsidiary to UFC and IMG Arena owner Endeavor in a $1.2bn deal.

The deal was announced on Tuesday 28 September and saw the Las Vegas-headquartered firm’s share price settle at $82.71, down slightly from the Monday 27 September closing price of $82.95, but well up week-on-week from Tuesday 21 September close of $73.73.

Wednesday 29 September saw the group secure a monthly high of $84.11 following the sale of the division, before closing out the month at $83.07.

Scientific Games had been trying to sell OpenBet since June as part of its strategy to become a content-led igaming firm, which also includes the divesting of its SG Lottery subsidiary.

In fact, on Wednesday 15 September, the firm lifted the lid on its lottery branch to encourage bids for the division. This saw the group’s share price jump slightly the following day to $79.39 before slipping dramatically to $73.43 by Friday 17 September.

Speaking on the OpenBet sale, CEO Barry Cottle said: “This transaction represents the culmination of a thorough process to divest OpenBet in order to maximise value for our shareholders and rapidly advance our vision to become the leading cross-platform global gaming company.

“The transaction is a significant milestone towards optimising our portfolio and de-levering the balance sheet to enhance our financial flexibility,” he added.