On Monday, MGM offered to acquire Nordic online gaming firm LeoVegas AB for $607 million, setting the stage for the US casino company. In a recent interview, MGM CEO Bill Hornbuckle suggested that the company may make a worldwide acquisition. On the other hand, analysts expected another attempt to acquire BetMGM’s partner company Entain.
Who is LeoVegas?
LeoVegas is a leading and trusted online casino company offering casino and sports betting products to customers across several different markets. With licenses in key jurisdictions such as the Nordics, Europe, and Latin America, the company has built a strong reputation as an innovator in the online gambling space. Additionally, LeoVegas also generates revenue from its .com operations, including in regions such as North America.
Why is MGM investing in LeoVegas now?
The announcement comes as a surprise, considering that MGM only recently launched its BetMGM joint venture with GVC. However, there are a few possible reasons why MGM might be interested in acquiring LeoVegas now.
First, it’s important to remember that the US online gambling market is still in its infancy. While BetMGM has made significant progress in building up its operations in the US, there’s still a lot of room for growth. By acquiring LeoVegas, MGM would instantly become a leading player in the global online gambling market.
Secondly, By acquiring LeoVegas, MGM would be able to generate revenue from other markets even if the US market doesn’t take off as quickly as expected.
Lastly, it’s worth noting that MGM isn’t the only casino company interested in acquiring LeoVegas. Rival casino operator Caesars Entertainment has also been rumored to be interested in acquiring the Nordic gambling company. As a result, MGM may be looking to develop LeoVegas to avoid being outbid by another casino operator.
Will LeoVegas accept?
For both companies, the takeover is still pending. However, the board of directors at LeoVegas has recommended the offer to shareholders. In addition, shareholders with 15.1 percent of the firm’s stock have indicated that they will accept the deal.
Others include LeoVegas founder and largest stockholder Gustaf Hagman.
MGM announced that the acquisition might be completed by the second half of this year.
How did the market react?
- Following the news, MGM shares were up 1% to $41.
- The firm will release Q1 earnings after the market closes on Monday.
- Because of a UK bank holiday, the stock was not traded Monday.