ENLABS
ENLABS - Entain bids SEK 40 per share in cash (ABG Sundal Collier)
2021-01-14 13:12
The bid represents a premium of 1.1%
A total of 42.2% of the votes are in favour of the bid
Promising trading update for Q4’20
The independent bid committee recommends the bid…On 7 January, Entain launched a cash offer for Enlabs of SEK 40 per share, corresponding to a premium on the previous close of 1.1%. However, the bid committee suggested that the first indicative bid offer was received as early as 20 February last year and that the bid premium towards that date is 87%. The bid from Entain requires 90% acceptance to go through. The independent bid committee recommends shareholders to accept the offer and the current BoD Niklas Braathen and board member Christian Haupt have already accepted the terms. Together they account for 42.2% of the votes in Enlabs. The acceptance period for the offer is expected to commence on 21 January 2021 and expire on 18 February 2021.
…but not everyone is happy
At first glance it seems like everyone is satisfied with the offer, but that is reportedly not the case. Another major shareholder, Hans Isoz, who accounts for 2.7% of the total votes in Enlabs said in a newspaper article in DI on 12 January that he will not accept the offer. Mr. Isoz also indicates that other unnamed accounts will not accept the offer and that they will represent more than 10%, which is required to block the current bid.
Raising ’21e-’22e EBITDA by 10-9%
The bid, which corresponds to an EV/EBITDA valuation of 12x for consensus estimates for 2021 is within the range (9.2x-14x) of other transactions we have witnessed in the sector between publicly-traded gambling operators. It is also within our fair value range of SEK 25-47, based on a low to high ’21e EV/EBITDA multiple towards peers. As we expect Enlabs to grow faster than our peer group, the range based on ’22e EV/EBITDA increases to SEK 30-57. If we assume a ’21e EV/EBITDA valuation of 12x (in accordance with what the bid committee found fair) it indicates SEK 48 per share on our updated numbers for ’21e, whi
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