STOCKHOLM, May 2, 2022 Key highlights and summary of the Offer - MGM offers SEK 61 in cash per LeoVegas share (the "Offer Price"). The total value of the Offer is approximately SEK 5,957 million. The price of SEK 61 per share in the Offer will not be increased.
- The Offer Price represents a premium of:
- approximately 44.1 percent compared to the closing price of SEK 42.32 of LeoVegas shares on Nasdaq Stockholm on 29 April 2022, which was the last trading day prior to the announcement of the Offer;
- approximately 57.6 percent compared to the volume-weighted average trading price of SEK 38.70 of LeoVegas shares on Nasdaq Stockholm during the last 30 trading days prior to the announcement of the Offer; and
- approximately 76.5 percent compared to the volume-weighted average trading price of SEK 34.56 of LeoVegas shares on Nasdaq Stockholm during the last 180 trading days prior to the announcement of the Offer.
- The Board of Directors of LeoVegas unanimously recommends that the Company's shareholders accept the Offer. The recommendation is supported by a fairness opinion provided by BDO AB.
- The Company's largest shareholder and Chief Executive Officer, Gustaf Hagman, and certain other shareholders, representing in total approximately 15.3 percent of the outstanding shares in LeoVegas, have entered into undertakings to accept the Offer, irrespective of whether a higher competing offer is made.
- The Offer is conditional upon the Offer being accepted to such extent that MGM becomes the owner of shares representing more than 90 percent of the total number of outstanding shares in LeoVegas. In addition, the Offer is made on the terms and subject to the conditions (ii)–(vii) set out below in this announcement.
- The acceptance period is expected to commence on or around 3 June 2022 and expire on or around 30 August 2022.
Commenting on the Offer, MGM Resorts' CEO & President Bill Hornbuckle, said: "Our vision is to be the world's premier gaming entertainment company, and this strategic opportunity with LeoVegas will allow us to continue to grow our reach throughout the world. We believe that this offer creates a compelling opportunity that allows the combined teams of MGM Resorts and LeoVegas to accelerate our global digital gaming growth and fully realize the potential of our omnichannel strategy. We look forward to being able to welcome the LeoVegas team to our MGM Resorts family." Background to and strategic rationale for the Offer LeoVegas was founded in 2011 by Gustaf Hagman and Robin Ramm-Ericson and has become a global gaming operator with gaming licenses in eight jurisdictions and over 860 employees. LeoVegas generated EUR 393 million in revenue and EUR 48 million in Adjusted EBITDA during the last twelve months ended March 31, 2022.2 LeoVegas has the long-term ambition to be a leader in the online casino industry and take the position as the "King of Casino" in the global gaming industry. The Company also offers sports betting, bingo and live casino. Over the last 10 years, LeoVegas become one of the leading online gaming companies. The online gaming industry is highly competitive and continuously evolving and companies need to adapt accordingly, by making investments in new in-house capabilities and improving their customer experience. In addition to in-house developments, like its back-end platform called Rhino, LeoVegas has performed targeted acquisitions such as Expekt and Royal Panda to expand its offerings and deliver a better customer experience. MGM has been following LeoVegas' progress with considerable interest and is impressed with the performance of the business as well as with LeoVegas' management team as to what they have achieved. MGM Resorts believes the acquisition of LeoVegas will provide a unique opportunity for MGM Resorts to create a scaled global online gaming business with the following attributes: - Strategic Opportunities to Accelerate Growth and Product Offerings – LeoVegas' online casino and sports betting capabilities and strong customer base outside of the U.S. is expected to further expand MGM Resorts' presence around the world.
- Experienced Online Gaming Management Team and Superior Technology Capabilities – LeoVegas' management team has demonstrated the ability to develop a robust and scalable technology platform with advanced product offerings.
- Commitment to Continued Profitable Growth – LeoVegas has operated profitably as a high-growth platform since 2014. From 2017 to 2021, LeoVegas' revenues compounded annual growth rate was 16 percent, while maintaining strong profitability. MGM Resorts' scale, brands and expertise will allow the combined businesses to expand within existing gaming segments and provide incremental opportunities to enter new areas.
Management and employees MGM values the skills and talents of LeoVegas' management and employees and intends to continue to safeguard the excellent relationship that LeoVegas has with its employees. Given MGM's current knowledge of LeoVegas and in light of current market conditions, MGM does not intend to materially alter the operations of LeoVegas following the implementation of the Offer, subject, of course, to MGM's continued regulatory review. There are currently no decisions on any material changes to LeoVegas' or MGM's employees and management or to the existing organization and operations, including the terms of employment and locations of the business. MGM will offer, and has received the consent of the Board of Directors of LeoVegas to offer, a management incentive plan for certain key employees of LeoVegas, including the CEO and CFO. The incentive plan, which is subject to completion of the Offer, is designed for the purpose of ensuring the continued long-term commitment by key employees and will be offered to key employees regardless of whether they currently own shares in LeoVegas. The eligible participants will be given the opportunity to choose between a bonus plan or participation by way of purchasing shares in MGM Casino Next Lion, LLC at market value. After an initial three-year period, participants will be able to discontinue their participation in: (i) the bonus-based incentive plan and receive cash payment corresponding to their share of the value created during that period, and (ii) the share-based incentive plan by having MGM Casino Next Lion, LLC redeem a portion of their equity interests at a redemption price equal to the fair market value of such equity interests at that time; provided that full discontinuation in the share-based version of the incentive plan will not be available until the seventh anniversary of the closing of the Offer. Customary provisions regulating the treatment of leavers will apply. If all eligible participants in the incentive plan participate to the fullest extent in the share-based incentive plan, the participants' aggregate ownership share in MGM Casino Next Lion, LLC will be 10 percent. MGM has obtained a statement from the Swedish Securities Council (Sw. Aktiemarknadsnämnden) (Ruling 2022:16) confirming that the management incentive plan is compatible with Nasdaq Stockholm's Takeover Rules (the "Takeover Rules"). The Offer Consideration MGM offers SEK 61 in cash per LeoVegas share. The Offer Price will not be increased. Should LeoVegas, prior to settlement of the Offer, distribute dividends or in any other way distribute or transfer value to its shareholders, the Offer Price will be reduced accordingly. The total value of the Offer is approximately SEK 5,957 million.3 No commission will be charged in connection with settlement of the Offer. The Offer Price represents a premium of: - approximately 44.1 percent compared to the closing price of SEK 42.32 of LeoVegas shares on Nasdaq Stockholm on 29 April 2022, which was the last trading day prior to the announcement of the Offer;
- approximately 57.6 percent compared to the volume-weighted average trading price of SEK 38.70 of LeoVegas shares on Nasdaq Stockholm during the last 30 trading days prior to the announcement of the Offer; and
- approximately 76.5 percent compared to the volume-weighted average trading price of SEK 34.56 of LeoVegas shares on Nasdaq Stockholm during the last 180 trading days prior to the announcement of the Offer.
MGM's shareholding in LeoVegas Neither MGM nor any closely related companies or closely related parties own any shares or other financial instruments in LeoVegas that give financial exposure to LeoVegas shares at the time of this announcement, nor has MGM acquired or agreed to acquire any LeoVegas shares or any financial instruments that give financial exposure to LeoVegas shares during the six months preceding the announcement of the Offer. MGM may acquire, or enter into agreements to acquire, shares in LeoVegas (or any securities that are convertible into, exchangeable for or exercisable for such shares) outside the Offer, but in any event, at a price per share not more than the Offer Price. Any purchases made or agreed will be in accordance with Swedish law and the Takeover Rules and will be disclosed in accordance with applicable rules. Recommendation from the Board of Directors of LeoVegas and fairness opinion The Board of Directors of LeoVegas unanimously recommends that the shareholders of LeoVegas accept the Offer.4 The Board of Directors of LeoVegas has obtained a fairness opinion from BDO AB regarding the Offer stating that the Offer is fair from a financial point of view to the shareholders of LeoVegas. Undertakings from shareholders of LeoVegas MGM has obtained irrevocable undertakings to accept the Offer from the Company's largest shareholder and Chief Executive Officer, Gustaf Hagman, and certain other shareholders. Gustaf Hagman has undertaken to tender 8,050,000 shares (8.2 percent of the outstanding shares in LeoVegas), and other shareholders have undertaken to tender a total of 6,909,281 shares in LeoVegas (7.1 percent).5 Accordingly, irrevocable undertakings to accept the Offer from shareholders representing in total 14,959,281 shares (15.3 percent) have been obtained. The irrevocable undertakings apply irrespective of whether a higher competing offer is made. The irrevocable undertakings will terminate if the Offer is not declared unconditional on or before 31 October 2022. In addition, Torsten Söderberg, who is also a board member of LeoVegas, has stated that he is very supportive of the Offer. Torsten Söderberg and family owns 4,533,861 shares in LeoVegas (4.6 percent). Conditions for completion of the Offer The completion of the Offer is conditional upon: (i) the Offer being accepted to such an extent that MGM becomes the owner of shares in LeoVegas representing more than 90 percent of the total number of shares in LeoVegas (on a fully diluted basis)6; (ii) the receipt of all regulatory, governmental or similar clearances, approvals and decisions that are necessary for the Offer and the acquisition of LeoVegas, including from competition authorities and gaming authorities, in each case on terms which, in MGM's opinion, are acceptable; (iii) no circumstances having occurred which could have a material adverse effect or could reasonably be expected to have a material adverse effect on LeoVegas' financial position, prospects or operations, including LeoVegas' sales, results, liquidity, equity ratio, equity or assets; (iv) neither the Offer nor the acquisition of LeoVegas being rendered wholly or partially impossible or significantly impeded as a result of legislation or other regulation, any decision of a court or public authority, or any similar circumstance; (v) LeoVegas not taking any action that is likely to impair the prerequisites for making or completing the Offer; (vi) no information made public by LeoVegas or disclosed by LeoVegas to MGM being materially inaccurate, incomplete or misleading, and LeoVegas having made public all information which should have been made public by LeoVegas; and (vii) no other party announcing an offer to acquire shares in LeoVegas on terms more favourable to the shareholders of LeoVegas than the Offer. MGM reserves the right to withdraw the Offer in the event that it becomes clear that any of the above conditions is not satisfied or cannot be satisfied. However, with regard to conditions (ii)–(vii) above, the Offer may only be withdrawn where the non-satisfaction of such condition is of material importance to MGM's acquisition of LeoVegas or if otherwise approved by the Swedish Securities Council. MGM reserves the right to waive, in whole or in part, one or more of the conditions above, including, with respect to condition (i) above, to complete the Offer at a lower level of acceptance. Information regarding MGM MGM Resorts International (NYSE: MGM) is an S&P 500® global entertainment company with national and international locations featuring best-in-class hotels and casinos, state-of-the-art meetings and conference spaces, incredible live and theatrical entertainment experiences, and an extensive array of restaurant, nightlife and retail offerings. MGM Resorts creates immersive, iconic experiences through its suite of Las Vegas-inspired brands. The MGM Resorts portfolio encompasses 32 unique hotel and gaming destinations globally, including some of the most recognizable resort brands in the industry. MGM's 50/50 venture, BetMGM, LLC, offers U.S. sports betting and online gaming through market-leading brands, including BetMGM and partypoker. MGM is currently pursuing targeted expansion in Asia through the integrated resort opportunity in Japan. Through its "Focused on What Matters: Embracing Humanity and Protecting the Planet" philosophy, MGM Resorts commits to creating a more sustainable future, while striving to make a bigger difference in the lives of its employees, guests, and in the communities where it operates. The global employees of MGM Resorts are proud of their company for being recognized as one of FORTUNE® Magazine's World's Most Admired Companies®. For more information, please visit www.mgmresorts.com. Please also connect with @MGMResortsIntl on Twitter as well as Facebook and Instagram. Financing of the Offer The Offer is not subject to any financing conditions. The cash consideration payable to the Company's shareholders under the terms of the Offer will be financed by the cash resources of MGM, whose domestic operations had, as of 31 December 2021, approximately USD 4.3 billion in cash and cash equivalents. Adjusting for recently announced and pending transactions as well as near-term debt maturities, MGM anticipates having over USD 6.5 billion in cash and cash equivalents on its balance sheet for its domestic operations. Treatment of warrant holders Certain employees hold warrants in LeoVegas issued within the Company's incentive programs. Such financial instruments are not included in the Offer. However, MGM will procure that the owners of such warrants in LeoVegas will receive reasonable treatment. Due diligence in connection with the Offer MGM has, in connection with the preparations of the Offer, conducted a due diligence review of LeoVegas. With the exception of information that was subsequently included in LeoVegas' Q1 report for 2022, LeoVegas has confirmed that MGM has not been provided with any inside information regarding LeoVegas in connection with the due diligence review. Preliminary timetable Publication of the offer document | 2 June 2022 | Acceptance period | 3 June 2022–30 August 2022 | Commencement of settlement | 7 September 2022 |
As set out above, the completion of the Offer is conditional upon, inter alia, the receipt of all regulatory, governmental or similar clearances, approvals and decisions that are necessary for the Offer and the acquisition of LeoVegas. Such clearances, approvals and decisions are expected to have been received by the end of the acceptance period for the Offer. If all relevant clearances, approvals and decisions are received in such time that the acceptance period can be closed before 30 August 2022, MGM may announce an earlier end date of the acceptance period, provided that such announcement can be made not less than two weeks prior to the new date of expiry of the acceptance period. MGM further reserves the right to extend the acceptance period for the Offer, one or several times, as well as to postpone the time for settlement. MGM has been granted an exemption from the Swedish Securities Council (Ruling 2022:17) permitting that the initial acceptance period for the Offer is longer than ten weeks (up to 18 weeks, subject to extensions) to enable MGM to obtain regulatory clearances within that period. Compulsory redemption proceedings and delisting If MGM, whether in connection with the Offer or otherwise, acquires shares representing more than 90 percent of the total number of shares in LeoVegas, MGM intends to commence compulsory redemption proceedings under the Swedish Companies Act (2005:551) to acquire all remaining shares in LeoVegas and to promote delisting of LeoVegas' shares from Nasdaq Stockholm. Governing law and disputes The Offer and the agreements entered into between MGM and LeoVegas' shareholders in relation to the Offer, shall be governed by and be interpreted in accordance with Swedish law. Disputes concerning, or arising in connection with the Offer, shall be settled exclusively by Swedish courts, with the Stockholm District Court as first instance. The Takeover Rules and the Swedish Securities Council's rulings and statements on the interpretation and application of the Takeover Rules are applicable to the Offer. MGM has undertaken to Nasdaq Stockholm to comply with the Takeover Rules and to submit to any sanctions that can be imposed on MGM by Nasdaq Stockholm in the event of a breach of the Takeover Rules. Advisors MGM has retained Goldman Sachs & Co. LLC as financial advisor and Advokatfirman Vinge KB and Weil, Gotshal & Manges LLP as legal advisors in connection with the Offer. MGM Casino Next Lion, LLC The Board of Directors Information about the Offer Information about the Offer is made available at:
http://investors.mgmresorts.com/investors/leovegas The information was submitted for publication on 2 May 2022, 7:30 a.m. CEST.
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