Under the non-negotiable offer, Global shareholders will have the opportunity to exchange their shares in the Ninja Casino operator for SEK11 in cash, and 0.36 shares in Enlabs. They may also accept a payment comprising a 50% cash consideration and 50% Enlabs shares.
This corresponds to Enlabs’ intended bid that it outlined when it increased its holding in Global to 54.06% in August, triggering the threshold at which it had to make a mandatory takeover offer for the business.
Since then, however, it has increased its stake in the business to 27.3m shares, or a 66.70% holding.
The total value of the offer for the 13.6m shares it does not already own is approximately SEK150m, Enlabs said, valuing Global’s entire issued share capital at SEK450m. A maximum of 4.9m shares in Enlabs may be issued in connection with the offer.
The cash consideration represents a premium of approximately 15% on Global’s closing share price on 26 August, the last day of trading before Enlabs triggered the offer threshold. The bid also represents a premium of 1% on Global’s closing price on 21 September, the day before the offer was made.
Explaining the rationale behind the deal, Enlabs said Global had developed strong positions in Finland and Estonia, meaning it would complement its strong position in the latter, and help it grow in the former.
“Furthermore, Enlabs sees that Global Gaming’s brands have the potential to be launched in Enlabs’ current main markets Estonia, Latvia, and Lithuania, as well as in certain geographical markets where neither Enlabs nor Global Gaming are active today, which Enlabs considers to be potential growth markets, such as Ukraine,” it continued.
“In addition, Enlabs views positively the possibility of enabling further geographical expansion for Enlabs’ own brands through the acquisition of Global Gaming.”
The acquisition would also result in economies of scale and cost savings, through reducing overlapping staff functions, as well as by sharing IT, marking and compliance expertise, which may ultimately total €5m annually.
An enlarged business would also be able to take on larger, more challenging projects, which would both expand the business and help attract new employees.
Following the bid, Global shareholders will have between 5 October and 2 November to accept Enlabs’ offer.
However, its chair Niklas Braathen also serves as chair of Enlabs’ board, meaning he is unable to participate in the Global board’s handling of the offer or any decision making around the bid. Global has therefore established an independent bidding committee, consisting of board members Jonas Bertilsson, who serves as its chair, Christian Rasmussen, Michael Niklasson and Arne Reinemo to represent the company in connection with the offer.
Rasmussen will serve as Global Gaming’s acting chief executive going forward, after Tobias Fagerlund agreed to step down from the position today (22 September).
The potential conflict of interest arising from Braathen’s roles also requires Global to obtain and publish an opinion stating the process is fair, from an independent expert. As a result KPMG Corporate Finance and Mangold Fondkommission will each issue an independent statement on the valuation of Global through the offer.
The committee will ultimately issue a statement on the offer no later than two weeks before the end of the acceptance period, which would suggest it makes a recommendation on whether shareholders should back the bid by 19 October.
Once the acceptance period ends on 2 November, Enlabs intends to announce its results a day later. Should it increase its stake to more than 90% of Global shares, it will delist the business from the Nasdaq First North Exchange.
It would then pay the cash consideration of the offer by 6 November, with new shares in Enlabs to be issued by 1 December. The operator still has scope to extend the acceptance period or postpone the deadlines for the share issuance or consideration payment.
Shares in Enlabs are trading down 1.23% at SEK32.20 in Sweden on Tuesday morning (22 September), having risen 56.31% in the past year. Shares in Global Gaming 555, meanwhile, are trading up 1.02% at SEK11.02 per share in Stockholm, having increased 64.23% in the past 12 months.