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Evolution Gaming make historic bid to buy NetEnt

It’s time for one of those earth-shattering online gambling mega deals again, just like when Canadian gaming group Amaya (now The Stars Group) bought PokerStars and Full Tilt Poker for $4.9 billion in the summer of 2014. Evolution Gaming – the acknowledged leaders in the live casino arena – have offered to purchase Swedish casino software giants NetEnt. If successful in this landmark bid, Evolution Gaming will surely be regarded as the world leader in the online casino business niche.

Evolution Gaming has offered to buy all shares held by NetEnt shareholders at a price of around SEK 80 (around £7 or $8.50) each or a 0.1306 Evolution Gaming share for each NetEnt share. The complete cost to Evolution Gaming will be SEK 19.6 billion, which is around £1.7 billion or $2.1 billion.

Will the bid be successful?

Netent Software

The leading shareholders of NetEnt are likely to find this offer impossible to turn down

Shareholders of the Swedish software giant NetEnt are likely to find this offer highly tempting. After a turbulent eighteen months due mainly to changes in casino regulations (particularly in Sweden and in the UK) and then the COVID-19 crisis, the share price of NetEnt when the offer was announced stood at around SEK 55 (around £4.75 or $5.90) down from the companies high of SEK 80 in the summer of 2016 but much improved from the low of just over SEK 38 set following the COVID-19 market crash of March this year.

NetEnt’s board of directors voted unanimously in favour of recommending that their shareholders accept the offer made by Evolution Gaming which – given that they are the major shareholders in the company – comes as no surprise.

The bid will be formalised around 14 August 2020. The shareholders will have between 17 August and 26 October to accept or refuse Evolution Gaming’s offer. The board of Evolution Gaming will have over 90 percent of the controlling interest of NetEnt if the bid is accepted.

The leaders of both Evolution Gaming and NetEnt see this potential deal as a positive one

Jens von Bahr, Evolution’s CEO, commented:

This strategic deal marks a significant step towards Evolution’s long-term vision of becoming the global market leader in the online casino industry. The combination of Evolution’s strong offering in Live Casino with NetEnt’s leading position in online slots will result in a world class portfolio of online games that will enable us to serve a growing customer base.

NetEnt having established a position in the US is also a plus point for the deal as on-going regulation in North America is anticipated to open up the market once more.

Mathias Hedlund, NetEnt’s CEO commented:

Evolution’s position within Live Casino combined with NetEnt’s position within online slots will create a company well positioned to take significant market shares. Through this transaction, a new chapter in the development of more entertaining online casino begins, in the best interest of players, operators, employees and shareholders.

The Evolution Gaming bid comes as both they and NetEnt plan their COVID-19 recovery strategies

Despite the COVID-19 pandemic, 2020 has been something of a ‘bounce back’ year for NetEnt after the company came under criticism by some in 2019 for simply re-hashing old ideas and re-skinning old slots and releasing them as ‘new’. Popular releases by NetEnt in 2020 included Gems of Adoria, Street Fighter 2 The World Warrior and Robin Hood Shifting Riches. News was also leaked recently that the company is giving one of its most popular slots – Gonzo’s Quest – a release with a ‘Megaways’ makeover, courtesy of Big Time Gaming and Red Tiger.

Evolution Gaming has been hit harder by the COVID-19 pandemic as their online casino software almost exclusively revolves around online live casinos. The company did not close their live casino studios in response to the pandemic, but they did reduce operations and allowed employees to work from home if such a thing was possible for them.

It seems inevitable that NetEnt’s shareholders will accept this bid from Evolution Gaming, although for the player, this means that very little will change other than seeing that NetEnt’s games now come with the Evolution Gaming logo, just like WMS and SG Digital.

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