MGM Resorts International has amassed a lot of clout in North America, but the casino resort and entertainment giant is looking to expand overseas and across different verticals as well. This is why in May the company revealed an ambitious plan to buy out LeoVegas, a Swedish gaming and sports betting company, which is finally likely to happen after the company announced that it had cleared the necessary regulatory approvals to pursue completion.
The deal set at $607m will be completed with MGM Resorts tipping into its own war chest to pay with cash on hand and secure the company’s full scope of operations. Effectively, MGM is offering $6.20 per LeoVegas share with the transaction expected to complete by the year’s end. The latest regulatory approval follows an Offer Document that was published on June 2 and has now been properly vetted by the respective regulators.
MGM said that these clearances were customary, and they involved anti-trust authorities as well as regulators to ensure that industries remain competitive and promote fairness and free enterprise. This is good news as the Offer Document had an expiry date set for August 30, which is now unlikely to matter. Settlement for shares will also take place as soon as MGM announces that the Offer Document has been fulfilled, the company reminded.
This acquisition partially reminds me of Blackstone Group’s purchase of Crown Resorts, an embattled Australian gaming giant that has been under tight regulatory scrutiny. Something similar happened with LeoVegas over the past several months. The company was fined by the UK Gambling Commission, Great Britain’s gambling regulator, and meted out a $1.6m penalty for AML breaches.
In June, about the time the Offer Document was tabled, Sweden’s Economic Crime Authority announced an investigation into potential insider trading involving LeoVegas stock. Both events could have disturbed potential investors, but not MGM Resorts which is determined to see the deal through.
LeoVegas is an important asset as it will enable MGM to scale internationally. The company already operates several prominent brands with very strong exposure in the UK market, including brands such as Betuk.com, 21.co.uk, and LeoVegas.com. MGM has been able to build up its offer throughout North America and beyond with plans to expand in Latin America.
The company’s commitment to growth has been visible in its consistency towards Integrated Resorts in Japan and resilience in Macau. The acquisition of LeoVegas is only going to add to MGM’s growing portfolio of assets that consolidate its global presence.
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Definitely big movements on the way!! MGM Resorts already making waves in North America with BetMGM. Will be interesting to see what this collision of European and NA gaming worlds results in, but I reckon it will take some time - still tremendous way to star the week!
I absolutely love LeoVegas' brands! They always deliver a great gaming experience, and I'm excited to see how this acquisition will change them.
What news to start the week! Do you guys like LeoVegas' brands and how do you feel this acquisition will change them if at all?
