MGM Resorts International has Made Offer to Buy LeoVegas

MGM Resorts International has today announced that it has commenced a recommended public tender offer for 100% of the shares of LeoVegas with aims to complete the deal in the coming months.

This comes at a price of approximately $607 million. The acquisition will be financed with existing cash from MGM Resorts, and is expected to be accretive to MGM Resorts' earnings and cash flow per share.

What Does This Mean?

This proposition is another massive play from MGM, one of the leading online gaming companies in North America, in pursuit of becoming the continent's leading name in the industry. 

It comes months after news of a potential deal from DraftKings to buy Entain for $22.4 billion, which would have been the biggest deal between two companies in the same space, but it fell through.

MGM Resorts believes the acquisition of LeoVegas will give it a unique chance to create a scaled global online company to accelerate growth and product offerings and commit to a continued profitable growth of MGM Resorts.

"Our vision is to be the world's premiere gaming entertainment company, and this strategic opportunity with LeoVegas will allow us to continue to grow our reach throughout the world," MGM Resorts' CEO & President Bill Hornbuckle said in a news release.

"We have achieved remarkable success with BetMGM in the U.S., and with the acquisition of LeoVegas in Europe we will expand our online gaming presence globally. We believe that this offer creates a compelling opportunity that allows the combined teams of MGM Resorts and LeoVegas to accelerate our global digital gaming growth and fully realize the potential of our omnichannel strategy. We look forward to being able to welcome the LeoVegas team to our MGM Resorts family."

Around June 2022 is when the acceptance period of the offer will begin, and it is expected to expire on or around August 2022. 

An offer document is expected to be made public just before the commencement of the acceptance period. Assuming that the offer is declared unconditional no later than around the end of August, settlement is expected to begin around early September. 

MGM Resorts’ offer is subject to certain regulatory approvals, and the receipt of valid tenders of more than 90% of LeoVegas' shares and customary closing conditions, which in itself could take plenty of time to conclude.

If all goes to plan for MGM Resorts and LeoVegas, the deal is expected to be completed during the second half of the fiscal year 2022.

What Is LeoVegas?

LeoVegas was founded in 2011 by Gustaf Hagman and Robin Ramm-Ericson and it has become a leading global online gaming company with licenses in eight jurisdictions, but primarily in the Nordics and rest of Europe. 

The business is headquartered in Stockholm, but it has offices in Malta, the United Kingdom, and Milan.

From 2017 to 2021, LeoVegas' revenues compounded annual growth rate was 16%, while maintaining strong profitability, and the company has rapidly become one of the biggest sports betting sites in Canada, too.