TOP NEWS: Entain Ups Earnings Guidance As It Buys Baltic Bookmaker

(Alliance News) - Ladbrokes Coral owner Entain PLC said Thursday it has made a GBP250 million ...

Alliance News 7 January, 2021 | 8:10AM
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(Alliance News) - Ladbrokes Coral owner Entain PLC said Thursday it has made a GBP250 million recommended offer for Enlabs, extending the UK bookmaker into Baltic markets.

The SEK40 per share offer values Enlabs at SEK2.80 billion, about GBP250 million.

"The acquisition is expected to be earnings accretive in Entain's first full year of ownership," Entain said on Enlabs.

Entain noted analyst consensus for 2021 shows Enlabs is estimated to generate net gaming revenue of EUR89.5 million and earnings before interest, taxes, depreciation and amortization of EUR23.5 million.

"Enlabs predominantly operates online sports-betting and gaming brands across the fast-growing Baltic region with a small retail presence. It is the market leader in Latvia, the second largest in Estonia and a top-five operator in Lithuania," the bookmaker added.

Entain said it had the support of the Enlabs board and shareholders representing 42% of the total.

The deal is expected to close in the first quarter, while Entain is expected to finance the offer from existing cash resources.

Chief Executive Shay Segev said: "The acquisition of Enlabs is perfectly aligned with our strategy of expanding across new regulated international markets. We are hugely excited by the growth opportunities it presents both in its existing markets and through new market opportunities.

"Enlabs is already a strong and rapidly growing business in its own right, but we now have a fantastic opportunity to turbocharge its growth by leveraging the power of our unparalleled proprietary technology, scale, product and marketing expertise."

The agreed bid comes in the wake of Entain rejecting a potential takeover offer from its US partner, MGM Resorts International, deriding the offer as too low.

Entain said on Monday: "Under the terms of its most recent proposal, MGMRI would offer 0.6 MGMRI shares for each Entain share. Based on closing prices on 31 December 2020, being the last trading day prior to this announcement, MGMRI's proposal represents a value of 1,383 pence per Entain share and a premium of 22% to Entain's share price."

Entain said it told MGM the proposed offer undervalues the company and asked its shareholders to take no action. MGM has until February 1 to make a firm offer or walk away.

On Thursday, the FTSE 100 firm added that it has continued its "strong performance" during its final quarter, despite government restrictions meaning it was forced to shut its UK bricks and mortar estate.

It bumped up its 2020 Ebitda guidance to between GBP825 million and GBP845 million, between 6% and 8% higher than the previous range.

Entain will announce a trading update on January 21.

Entain shares were 0.6% higher at 1,468.00 pence each in London on Thursday morning.

By Paul McGowan; paulmcgowan@alliancenews.com

Copyright 2021 Alliance News Limited. All Rights Reserved.

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