MGM Resorts is betting on the purchase of LeoVegas
Pending the shareholders' decision, the LeoVegas board of directors has expressed its decision to recommend acceptance of the takeover offer submitted by MGM Resorts International, the Paradise, Nevada-based hotel and entertainment chain. MGM Resorts' strategy is to consolidate its global presence in the online segment. Something they hope to achieve with the acquisition of the LeoVegas online casino, which would mean for MGM Resorts to enter the important European gambling market.
MGM Resorts International's businesses are complex. Its assets in Las Vegas are decreasing while increasing its international presence and in the online segment of sports betting. Now, MGM is ready to take over the Swedish online casino LeoVegas. ©David Vives/Unsplash
The casino of Swedish origin with Maltese license LeoVegas is not doing bad online business at all. In addition to being one of the most awarded casinos in the international igaming scene, with a mobile version that has been really innovative, the European operator has been reporting very good financial results for some time. In the last quarterly report, its CEO, Gustaf Hagman, pointed out the high profitability achieved and a 44% growth in the sports betting vertical .
During the first quarter of 2022 LeoVegas has registered a revenue growth of 2%, although excluding the Netherlands growth is at 9% . Earnings before taxes, interest, amortization, etc. (ebitda) have increased by 35% compared to the same period last year.
LeoVegas has been able to take advantage of certain improvements in the group's management and compensate strategic investments such as its launch in the important US market . It has also achieved an official license to operate in Ontario, in Canada, with the LeoVegas and Royal Panda brands. It is not at all strange that LeoVegas is an appetizing fruit in the international igaming market.
Large US corporations are making heavy investments in the online segment and it is European companies that have the experience, technology and licenses necessary to operate internet casinos globally. Caesars Entertainment started the race with its acquisition of William Hill. Recently, DraftKings tried it with Entain , although he did not succeed; an Entain who is partnered with MGM to exploit the online bookmaker BetMGM. Now, MGM Resorts wants to expand your online presence with a prestigious brand like LeoVegas .
The details of the acquisition of LeoVegas
According to the official statement released by MGM Resorts , the offer for the acquisition of LeoVegas is for 100% of the shares of the Swedish group at a price of SEK 61 per share in cash. The estimated total value of the transaction approaching $607 million . The board of directors of LeoVegas would have already recommended to its shareholders to accept the offer of MGM Resorts.
From MGM Resorts is expected with the acquisition exploiting LeoVegas' customer base outside the United States and thus increase its global presence; as well as, take advantage of the competence of the Swedish casino in terms of casino and online sports betting. In this regard, the technological platform created by LeoVegas is of enormous interest to MGM. The North American corporation also highlights the sustained growth of the Swedish company. From 2017 to 2021 LeoVegas has maintained a steady annual growth rate around 16%.
“Our vision is to be the world's leading gaming entertainment company, and this strategic opportunity with LeoVegas will allow us to continue increasing our global reach. We have achieved remarkable success with BetMGM in the United States, and with the acquisition of LeoVegas in Europe we will expand our online gaming presence globally. We believe this offering creates an attractive opportunity that allows the combined MGM Resorts and LeoVegas teams to accelerate our global digital gaming growth and fully realize the potential of our omni-channel strategy.” – Bill Hornbuckle , director and president of MGM Resorts in official statement
There is a period for the acceptance of the offer that would begin in June 2022 and that would conclude two months later. Pending the fulfillment of some requirements by the regulatory authorities, we would be talking about that the liquidation of LeoVegas shares it would take place in September of this year at the latest.
