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MGM initiates tender for 100% of LeoVegas AB shares

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MGM Resorts International aims to create a scaled global online gaming business with the acquisition of LeoVegas.

There's always something interesting to look forward to for the online casino industry, whether it's a new game release or possible industry acquisitions.

The latest that has taken the industry by storm is MGM's public cash offer to purchase 100% of LeoVegas AB. The industry giant, MGM Resorts International, aims to expand its business holdings while creating a scaled global online gaming business should the deal go through.

MGM set on LeoVegas

The land-based gaming giant MGM Resorts International has made a public cash offer to acquire the online gambling operator LeoVegas for $607 million (£482.8m/€576.6m).

The Swedish Online Gaming Company, LeoVegas AB, has been offered 61 crowns ($6.20) cash per share, which is the recommended public tender offer according to the public release. MGM has also stated that this offer will not be increased.

MGM has been looking for a way to capitalize on sports betting alongside its joint venture BetMGM. The MGM Resorts CEO and President, Bill Hornbuckle, said that they have had remarkable success with BetMGM throughout the US. He believes that they will be able to expand their online gaming presence globally with the acquisition of LeoVegas in Europe.

MGM is confident that the deal will be closing during the second half of the 2022 fiscal year. This remains to be seen as it depends on shareholders' decisions and regulatory approvals.

In a recent press release, Hornbuckle revealed the vision for MGM is to be the world's premier gaming entertainment company. The strategic opportunity with MGM will allow them to continue growing their reach across the globe.

This is not the first time MGM has attempted to break out and grow globally with iGaming. The first attempt was when they made a bid on Entain PLC for $11 billion in 2021. Unfortunately, this was unsuccessful as Entain felt the offer did not value its shares or prospects.

The odds of acceptance

LeoVegas is a beloved online gaming brand with licenses in eight European jurisdictions. In the last 10 years, it has become one of the leading online gaming companies, continuously evolving and keeping up with the industry trends.

There have been several potential offers to purchase LeoVegas, but MGM has managed to knock other potential contenders off the board by bumping up the value of its offer during negotiations.

According to sources, the LeoVegas board of directors has unanimously recommended that the company's shareholders accept the MGM offer. About 15.3% of shareholders representing the company's stock have agreed to accept the offer. This includes CEO Gustaf Hagman. The acceptance period starts in June and will expire in August 2022.

While the offer may hold some appeal, one needs to consider that LeoVegas is one of the biggest operators in the iGaming industry. With a revenue of about $3.5 billion, one would think that an offer of $607 million is a lot less than they can get.

It's not clear whether the offer is seriously being considered, but it could be declined as too low. And as the public release from MGM states, the offer isn't going to increase. While some shareholders have already agreed to accept, the majority are yet to vote.

Stay tuned as we keep you posted on the latest developments in MGM's bid to acquire LeoVegas AB.

Published: May 18, 2022

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Article by Stelly

CasinoWow Contributor

Hey there! I am Stelly, and happily, I'm part of CasinoWow's content team. It excites me to be able to write and share with all gambling enthusiasts unbiased reviews and news that contribute to the gambling community and industry. Thankfully, I also have the chance to help you make an informed choice for casino brands and games, as well as provide interesting guides and news.

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