Deadline for NetEnt Offer by Evolution Amid CMA Investigation

One of the top providers of live dealer casino solutions, Evolution (formerly Evolution Gaming), has extended the period for slot specialist NetEnt to accept its acquisition offer. NetEnt’s shareholders will now have until 20 November to announce their decision.

The extension comes in order to allow the UK’s Competition and Markets Authority (CMA) to investigate the deal. This deal has already been approved by Malta’s Competition and Consumer Affairs Authority, with the regulator giving it the green light on 29th September.

“As a result of the timing for the CMA process, the board of directors of Evolution has resolved to extend the acceptance period for the offer up to and including 20 November 2020,” said the Evolution’s board.

of the Deal Remain the Same

To recall…

… Evolution has tabled a SEK19.6bn ($2.11bn/€1.87bn) offer for the casino games software developer, showing its intent to become “the world leader in the online gaming industry.” The offer works out at SEK79.93 per share.

At the time…

… the award-winning provider stated that 20% of NetEnt shareholders had indicated their willingness to accept the offer, while NetEnt’s board of directors has unanimously recommended other shareholders to approve the bid as well. But before making its final decision, the brand had to evaluate other options, although it is clear that the merger seems like the right choice for its stakeholders.

According to analysts, such a high offer is above the consensus benchmark price. Also, it is estimated that such a merger could immensely increase revenues of both companies in the period, thus creating a leading platform of online casino products in several verticals.

But, merging these two iGaming giants will have to wait a little longer for CMA to investigate the agreement and give it a thumbs up. Initially, the period for NetEnt to accept this offer was scheduled to expire on 30 October, meaning the deal could have been finalized by 2 November.

However…

… this period has now been pushed back by just under four weeks, with the settlement of the deal expected to begin on 1 December. Evolution’s board stated that the and conditions of the offer will remain unchanged, with only the acceptance period has been extended.

CMA’s Concerns

The main reason why the UK’s Competition and Markets Authority (CMA) is investigating Evolution Gaming’s proposed acquisition of NetEnt is a concern that the merger could lead to a reduction in competition in the UK iGaming market.

Since the deal will lead towards Evolution’s ambitious plans to become “the world leader in the online gaming industry,” CMA has stepped in to establish whether the merger will result in a “substantial lessening of competition” in this regulated market.

As announced by the CMA…

… the investigation was opened on 22 September, while its invitation for interested parties to comment was closed on 5 October. After analyzing these responses, the Authority will announce whether the investigation will proceed to a second phase on or before 16 November.

Source:

“Evolution extends deadline for NetEnt offer amid CMA review”, igamingbusiness.com, October 12, 2020.