Kambi Could Be Takeover Target After Ditching Poison Pill
Posted on: February 12, 2022, 03:57h.
Final updated on: February 12, 2022, 06:05h.
Takeover speculation is swirling about Kambi Group Plc (OTC:KMBIF). That’s soon after the sports betting platform provider ditched a poison pill provision hindering its ability to be acquired.
Kambi mentioned final week it happy the terms of a $8.five million convertible bond agreement reached when Kindred spun the technology business off in 2014. It announced that whilst certifying its partnership with Swedish sportsbook operator Kindred — its former parent business — is extended via 2026,
Convertible bonds are debt that can be converted into equity of the issuing business, meaning Kindred wielded manage over Kambi to the extent that it could have stood in the way of a suitor searching to make a deal. That hurdle is a thing of the past.
Kambi now has the option to prepay the full loan quantity and exit the bond agreement at any time of its personal discretion,” according to a statement issued by Stockholm-listed Kambi. “Upon the prepayment of the convertible bond, Kambi will no longer be necessary to seek prior consent for particular events and will eliminate the prospect of Kindred converting the bond into shares, which would have provided the operator a controlling influence more than Kambi.”
The Malta-primarily based organization and its investors now have full handle of its future path, which could consist of positioning itself for a takeover.
Plenty of Suitors Could Line Up for Kambi
Less than two months into 2022, the gaming business is currently a hotbed of takeover offers and connected rumors.
With far more sportsbook operators looking for each vertical integration and to lessen, they’re bringing tech stacks in house — some thing that is usually easier to accomplish via acquisition. That is already affected Kambi, as it previously lost DraftKings (NASDAQ:DKNG) as a client and is most likely to encounter a comparable outcome with Penn National Gaming (NASDAQ:PENN).
Even with lost company, Kambi’s technologies is worthwhile to would-be purchasers and the list of potential suitors involves effectively-recognized names.
“Kambi has extended created sense as an acquisition target for B2C operators searching to bring technology in-home,” wrote RoundHill Investments co-founder Will Hershey in the firm’s weekend newsletter. “Now that Kindred’s poison pill has been addressed, this becomes a very actual possibility. In terms of possible acquirers, I think that Penn, Fanatics, and Rush Street all could be in the operating for various strategic causes.”
Kambi sports an enterprise worth of $831 million as of Feb. 11 — an easily digestible figure for any number of suitors.
Bidder Might Have Currently Emerged
Due to Kambi calling the aforementioned convertible bond and landing a new 3-year accord with Kindred two years in advance of the current agreement expiring, there’s speculation that Kambi may possibly currently be holding talks with an unidentified bidder.
Whilst that’s unconfirmed, the logic makes sense, simply because there was no reason for Kindred to sign off on new pact with two years remaining on the present one.
Kambi clientele contain ATG, Churchill Downs Incorporated, Kindred Group, LeoVegas, Penn National Gaming, and Rush Street Interactive, according to the company.