The takeover of LeoVegas by MGM Resorts has taken a huge step forward. 96% of LeoVegas AB shareholders have voted to accept the deal.
It was in May that the MGM board proposed a SEK 61 (€5.90) cash-per-share takeover offer that would total around $604m (€600m). The LeoVegas AB board ‘unanimously recommended’ their investors approve the deal and that’s just what has happened this week.
The acquisition of LeoVegas will be the first overseas one for MGM Resorts. It’s described as being imperative for the company in their ambition to become a ‘globally-scaled and dominant’ business in the online gambling industry.
Their President is Bill Hornbuckle and he says that the company has “achieved remarkable success with BetMGM in the US’ but now they have their eyes on Europe too.
In the past, there has been talk of them trying to acquire Entain who own companies such as Ladbrokes and Coral. Last year saw them make an $11bn offer for Entain who turned the offer down. They said that the offer had “significantly undervalued future prospects.”
With Entain recently being ordered to make a £17m regulatory settlement with the UK Gambling Commission, could MGM again come calling with an offer?
LeoVegas have also had problems with the UK Gambling Commission. They were recently fined £1.3m for breaches of their license during 2019 and 2020. Those included social responsibility failings with triggers for a safer gambling customer review being set too high.
Hornbuckle added that the LeoVegas deal will allow the acceleration of their global digital gaming growth. LeoVegas had corporate revenues of €393 million and €48 million in adjusted EBITDA for the twelve months up to 31 March 2022.
With that success, MGM are unlikely to make too many changes to how LeoVegas operate. In fact, MGM believes that the addition of the executive management team of LeoVegas will strengthen them after their deliverance of a robust and scalable technology platform with advanced product offering.
Before the LeoVegas shareholders voted in approval of the deal, their co-founder and CEO Gustaf Hagman had approved the deal alongside other senior investors who have 15% of their shareholding. The settlement of the share deal is likely to be initiated in early September.
Hagman feels that joining forces with MGM Resorts is a “major win” for his company. He added that they are “excited” to be working with what he calls their “new teammates.” This will give them the chance to “build upon the work we’ve done over the last ten years.”
