While the gains have since been erased, shares of MGM Resorts International (NYSE: MGM ), which is trading under the symbol MGM , is considering a bid for Swedish gaming company Kindred Group (OTC: KNDGF ), traded higher on Friday. There was a surge in early trading hours.
Sources say Kindred could be a target of interest for MGM and an unidentified British gaming company, according to Betaville Alert, cited by SeekingAlpha. As for which British company may compete with Kindred, sources believe that there are two options, FanDuel parent company Flutter Entertainment and Entain Plc.
Given the company’s recent slew of deals, Entain is a meaningful pick. However, if both Entain and MGM intend to acquire Kindred, this could lead to tensions among the BetMGM partners. So far, neither company has publicly expressed interest in Kindred, and neither has Flutter.
Kindred Is On the Block
While there has been much speculation about which companies might be sensible suitors for Kindred, there is little doubt that in April the company announced that it was considering strategic alternatives, including a possible sale option.
The Nasdaq Stockholm-listed operator has since addressed the departures of its chief executive, chief financial officer, chief gaming officer and chief marketing officer. Despite the big change in management, Kindred has been a loyal buyer of its own stock — which analysts say could be a harbinger of a sale.
Speculation about MGM’s interest in Kindred arose in May, and on many fronts is plausible. Keith Meister’s Corvex management was one of Kindred’s impetus for the corporate action, and he is also a director of MGM.
Separately, the Las Vegas-based casino giant also has a track record of acquisitions in Sweden, albeit modest ones. Last year, MGM bought LeoVegas AB for $607 million.
Likewise, it was reported in May that Kindred was in early deal talks with Entain, EvolutionAB and Flutter.
Kindred Is Affordable
With a market cap of $2.59 billion, Kiende would suit any number of suitors. The extent, if any, of MGM and Entain’s pursuit of Kiende could be of interest amid renewed speculation that the Bellagio operator may reconsider acquiring its BetMGM partner.
MGM’s acquisition of Entain cost far more than it paid for Kindred. The same applies to the acquisition of Coral owners from BetMGM.
In a recent second-quarter earnings call, Kindred’s top management confirmed that the strategic review was underway and said progress was in line with expectations. The company’s current focus is on increasing market share and controlling costs, they added.