Entain makes offer for Sweden's Enlabs, lifts FY expectations

Ladbrokes owner Entain said on Thursday that it has offered to buy Swedish sports betting firm Enlabs AB for around SEK2.80bn (£250m), as it upgraded its full-year expectations after a "strong" final quarter.

Entain, which announced earlier in the week that it had rejected an $11bn takeover approach from MGM Resorts, has made a recommended cash offer of SEK40 for each Enlabs share. The offer has been recommended by Enlabs' board, and shareholders holding around 42.2% of the total number of Enlabs shares have undertaken to accept it.

The company also lifted its full-year expectations following a strong final quarter of 2020. Earnings before interest, tax, depreciation and amortisation are now expected to be between £825m and £845m, up 6% to 8% compared to the guidance given in the third quarter.

Entain said that for the year to the end of December 2021, Enlabs is expected to generate net gaming revenue of €89.5m (£80.5m) and EBITDA of €23.5m (£21.1m). The deal is expected to be earnings accretive in Entain's first full year of ownership.

Enlabs mainly operates online sports betting and gaming brands across the Baltic region, with a small retail presence. It is the market leader in Latvia, the second largest in Estonia and a top-five operator in Lithuania.

Entain said the acquisition is directly aligned with its stated growth strategy of entering locally regulated markets where it does not currently have a presence.

Chief executive officer Shay Segev said: "We are hugely excited by the growth opportunities it presents both in its existing markets and through new market opportunities. Enlabs is already a strong and rapidly growing business in its own right, but we now have a fantastic opportunity to turbocharge its growth by leveraging the power of our unparalleled proprietary technology, scale, product and marketing expertise."