Ladbrokes Owner Entain to Acquire Swedish Gambling Firm Enlabs for £250 million

Leading British sports betting and online gambling giant Entain has its sights set on acquiring Enlabs, a top Swedish online gaming company, for a whopping £250 million after an impressive performance in the previous year. This announcement comes shortly after the owner of Ladbrokes, Bwin, and Coral rejected an offer of £8.09 billion from American casino powerhouse MGM Resorts.

The rebranded Entain (formerly GVC Holdings) believes that acquiring Enlabs AB will greatly enhance its presence in the rapidly expanding Baltic and Nordic markets. The deal will be financed using the company’s existing cash reserves at a cost of 40 Swedish Kronas per share.

Shay Segev, CEO of Entain, stated, “The acquisition of Enlabs perfectly aligns with our growth strategies as we plan to venture into emerging and unregulated international markets.” This is the second time that Entain has turned down MGM Resorts’ offer, claiming that it significantly undervalues their worth.

This merger is also reflected in the stock market as Enlabs (which owns NinjaCasino and Optibet) saw a rise of 1.8% in its usual trading price while Entain’s prices also increased marginally.

Segev further explained, “We are thrilled about the potential for growth that this acquisition presents us with – both in our current markets and new ones. Enlabs is a rapidly growing business and we have the opportunity to further accelerate this growth by utilizing our expertise in product marketing, cutting-edge proprietary technology, and scale.”

The Advantages of Acquiring Enlabs

Niklas Braathen, President of Enlabs, will continue to lead the company and spearhead its expansion in emerging markets. “When Entain proposed the acquisition of Enlabs, we immediately recognized its strategic importance,” Braathen stated. “Our interactions with the team have only confirmed our belief that Entain is the perfect fit for our brand, employees, and clients.”

Entain expects to report earnings before interest, depreciation, tax, and payback between £825 million and £845 million for 2020. This surpasses their previous projection of £770 million to £790 million for the year. The company attributes this improvement to a strong performance in the final quarter despite challenges posed by the pandemic and subsequent lockdowns on retail businesses.

MGM Resorts Undervaluing Entain’s Worth

According to reports, Entain believes that MGM Resorts’ offer greatly undervalues their operations given the expected boom in the US gambling industry. Following a historic Supreme Court decision overturning PASPA (Professional and Amateur Sports Protection Act), many see the US as a prime location for significant growth.

While MGM proposed a takeover at 1,383 pence per share, Entain’s current value stands at 1,455 pence per share – an increase of nearly 28%. With plans for rapid expansion and potential acquisitions, Entain is poised to dominate the market.