The process began earlier this year, when Corvex Management became Kindred’s second-largest shareholder this year and immediately called for the board to pursue a sale.
At the time, Evert Carlsson, chairman of Kindred, said the business remained confident in its current strategy.
However, iGB understands that its board has taken steps to assess interest from prospective buyers. These included European giants Entain, 888 and Tipico, as well as private equity businesses such as Apollo Global and Blackstone. However, there was little interest in pursuing the opportunity.
Among the operators involved, consensus has been that the business had not been “able to update its business model as markets regulate” meaning an acquisition was not considered valuable at the current price.
Kindred shares currently trade at SEK77.66 (£6.35/€7.44/$7.59), giving the business a market capitalisation of SEK17.64bn. The business’ earnings before interest, tax, depreciation and amortisation in 2021 was £94.9m, which is about one fifteenth of its market cap.
One person with knowledge of the sale process noted that Kindred had declared a greater focus on regulated markets in recent years, but suggested further progress was needed.
“In my opinion, this is because there had not been a change in management,” they said.
Another source noted that other factors such as raising debt to make an acquisition of this scale played a part for others not moving forward with the opportunity, as did the strategic fit for operators that were strong in the same regions.
In the private equity sector, meanwhile, regulatory hurdles involved in owning a gambling business – and the time commitment involved in these – were cited as issues.
Another source with knowledge of the situation said that Kindred’s efforts to build its own sportsbook had added to uncertainty.
With a sale appearing unlikely, Corvex – which owns 10.12% of Kindred – may take further steps to accelerate a potential deal, sources suggested. This could involve either pushing for a management change, or encouraging the board to make an acquisition. However, even taking these steps would not guarantee a deal would be reached.
Kindred declined to comment on the matter, as did Entain and 888. Representatives of Tipico and Corvex did not respond to requests for comment.