REG-Entain Plc: Recommended Cash Offer for Enlabs AB

EntainAnnouncement

07/01/2021 07:05

This announcement is not an offer, whether directly or indirectly, in
Australia, Canada, Hong Kong, Japan, New Zealand or South Africa or in any
other jurisdiction where such offer pursuant to legislation and regulations in
such relevant jurisdiction would be prohibited by applicable law. Shareholders
not resident in Sweden who wish to accept the Offer (as defined below) must
make inquiries concerning applicable legislation and possible tax
consequences. Shareholders should refer to the offer restrictions included in
the section titled “Important information” at the end of this announcement
and in the offer document which will be published shortly before the
commencement of the acceptance period under the Offer. Shareholders in the
United States should also refer to the section titled “Special notice to
shareholders in the United States” at the end of this announcement.

PRESS
RELEASE                                           
       7 January 2021

Entain announces a recommended cash offer to the shareholders of Enlabs AB

Entain plc (formerly known as GVC Holdings plc) the global sports-betting and
gaming group, through its wholly-owned subsidiary Bwin Holdings (Malta)
Limited (“Entain”), hereby announces a recommended cash offer to the
shareholders of Enlabs AB (“Enlabs” or the “Company”) to tender all
their shares in Enlabs to Entain at a price of SEK 40 per share (the
 “Offer”).

The shares in Enlabs are admitted to trading on Nasdaq First North Growth
Market (“Nasdaq First North”) of Sweden.

The Offer in brief

·    Entain offers SEK 40 in cash per share in Enlabs. 1  The Offer values
Enlabs at around SEK 2.80 billion (equivalent to approximately GBP 250 million
at the time of this announcement). 2 

·    The Independent Bid Committee of Enlabs has unanimously resolved to
recommend the Company’s shareholders to accept the Offer. The recommendation
is supported by a fairness opinion provided by Mangold Fondkommission AB.

·    Shareholders holding in aggregate around 42.2% of the total number of
Enlabs shares have undertaken to accept the Offer.

·    The Offer represents a premium of:

-     approximately 42.3% compared to the volume-weighted average price of
SEK 28.12 per Enlabs share on Nasdaq First North during the last 180 trading
days prior to the announcement of the Offer;

-     approximately 15.6% compared to the volume-weighted average price of
SEK 34.61 per Enlabs share on Nasdaq First North during the last 90 trading
days prior to the announcement of the Offer; and

-     approximately 1.1% compared to the closing price of SEK 39.55 per
Enlabs share on Nasdaq First North on 5 January 2021, which was the last
trading day prior to the announcement of the Offer.

·    The acceptance period is expected to commence on or around 21 January
2021 and expire on or around 18 February 2021.

 1  If Enlabs pays dividends or makes any other distributions to Enlabs
shareholders, for which the record date occurs prior to the settlement of the
Offer, the price under the Offer will be reduced accordingly.

 2  Based on 69,924,433 shares in Enlabs.

Background to and reasons for the Offer

Enlabs is an established and leading gaming company operating in the Baltics.
Based on total revenues, the Company is the market leader in Latvia, the
second largest in Estonia, and among the five largest operators in Lithuania.
Enlabs is headquartered in Riga with offices in Tallinn, Vilnius, Minsk,
Malta, Marbella and Stockholm.

The Baltic region represents a highly attractive, locally regulated and
fast-growing gaming market. Entain does not currently operate in these
geographies and entry is aligned with Entain’s strategy to focus on growth
markets which are locally regulated and taxed. The acquisition of Enlabs
represents a synergistic combination with a pre-eminent operator, with high
operating standards and a market-leading customer proposition. 

Entain believes that a combination with Enlabs would allow Enlabs to
accelerate delivery of its ambitions both in terms of growth within its
existing markets and successful expansion into adjacent markets, including
Belarus and Ukraine. Leveraging the combined expertise across the enlarged
group would deliver an enhanced proposition to Enlabs’ customers. In a
highly competitive and regulated industry, Entain believes scale and
diversification is essential to continue to create shareholder value. Entain
places great value on Enlabs’ organization and, by leveraging Entain’s
scale, proprietary technology, marketing skills and products, will drive
further growth in order to create long-term positive effects for Enlabs
employees and other stakeholders. Entain’s plans for the future business and
general strategy do not currently include any material changes to Enlabs’
organization, management and employees, including their terms of employment,
or to the locations of Enlabs’ operations. 

As further described under “Undertakings to accept the Offer and certain
other contractual arrangements”, subject to completion of the Offer, Entain
intends to retain the services of Niklas Braathen, the current chairman of the
board of Enlabs, to develop the Entain group’s operations in the Baltic and
Nordic regions and its expansion into parts of Eastern Europe.

Shay Segev, CEO of Entain plc comments:

“The acquisition of Enlabs is perfectly aligned with our strategy of
expanding across new regulated international markets. 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.”

Niklas Braathen comments:

“When Entain’s interest to acquire Enlabs emerged, we instantly saw the
strategic logic. Our interaction with them so far has confirmed they will
provide an excellent home for the company, its customers and employees.
Entain’s experience and track record in many different geographic markets,
together with its market-leading proprietary technology and world-class
marketing skills are key attractions for Enlabs as we look to grow in the
Baltics and beyond. Finally, Enlabs has achieved an enormous amount as an
independent business, but we recognise the established trend of industry
consolidation and the growing importance of scale.”

The Offer

Entain offers SEK 40 in cash per share in Enlabs. If Enlabs pays dividends or
makes any other distributions to the shareholders, for which the record date
occurs prior to the settlement of the Offer, the price under the Offer will be
reduced accordingly. The Offer values Enlabs at approximately SEK 2.80
billion (based on 69,924,433 shares in Enlabs).

No commission will be charged in respect of the settlement of the Enlabs
shares tendered to Entain under the Offer.

The Offer represents a premium of:

-    approximately 42.3% compared to the volume-weighted average price of
SEK 28.12 per Enlabs share on Nasdaq First North during the last 180 trading
days prior to the announcement of the Offer;

-    approximately 15.6% compared to the volume-weighted average price of
SEK 34.61 per Enlabs share on Nasdaq First North during the last 90 trading
days prior to the announcement of the Offer; and

-    approximately 1.1% compared to the closing price of SEK 39.55 per
Enlabs share on Nasdaq First North on 5 January 2021, which was the last
trading day prior to the announcement of the Offer.

Entain does not hold any shares in Enlabs or any financial instruments that
give a financial exposure to Enlabs shares. Nor has Entain during the six
months preceding the announcement of the Offer acquired or agreed to acquire
any Enlabs shares or any financial instruments that give a financial exposure
to Enlabs shares. For information about undertakings given by larger Enlabs
shareholders to accept the Offer, please see “Undertakings to accept the
Offer and certain other contractual arrangements” below.

The Offer does not include warrants issued by Enlabs and acquired by employees
under the incentive program implemented by Enlabs. Entain will offer the
holders of such warrants a fair treatment in connection with the Offer.

Entain may acquire, or enter into arrangements to acquire, shares in Enlabs
outside the Offer. Any acquisitions made or arranged will be in accordance
with Swedish law and the Takeover rules for certain trading platforms adopted
by the Swedish Governance Board (the “Takeover Rules”) and will be
disclosed in accordance with applicable rules.

Statement from the Independent Bid Committee of Enlabs

Niklas Braathen is the sole board member of Erlinghundra AB (an entity that is
controlled by Niklas Braathen’s family), and Christian Haupt is a part-owner
of Atletico Nordic B.V. Entain has been informed by Enlabs that as a result of
Erlinghundra AB’s and Atletico Nordic B.V.’s undertakings to accept the
Offer, an Independent Bid Committee consisting of the remaining board members
was appointed on 6 January 2021 and has since handled questions relating to
the Offer. For more information about the acceptance undertakings, please
refer to “Undertakings to accept the Offer and certain other contractual
arrangements” below.

The Independent Bid Committee of Enlabs has informed Entain that it has
unanimously resolved to recommend to the shareholders of Enlabs to accept the
Offer and that the recommendation is supported by a fairness opinion provided
by Mangold Fondkommission AB.

Undertakings to accept the Offer and certain other contractual arrangements

The shareholders set out below have provided irrevocable undertakings to
Entain to accept the Offer. In aggregate, such shareholders hold 29,528,370
Enlabs shares, corresponding to approximately 42.2% of the shares and votes in
Enlabs. The undertakings are conditional only on the Offer being declared
unconditional on or before 17 May 2021.

 SHAREHOLDER           NUMBER OF SHARES  PERCENTAGE OF CAPITAL AND VOTING RIGHTS  
 Erlinghundra AB       13,772,207        19.7%                                    
 Atletico Nordic B.V.  11,281,429        16.1%                                    
 Anders Tangen         2,435,283         3.5%                                     
 Filip Andersson       1,418,451         2.0%                                     
 TNGN Invest AB        300,000           0.4%                                     
 Jan Ove Tangen        250,000           0.4%                                     
 Norrlandet Invest AB  71,000            0.1%                                     
 Total                 29,528,370        42.2%                                    

Erlinghundra AB has further undertaken, subject to the Offer being declared
unconditional, to invest EUR 15 million into shares in Entain plc within four
months of receipt of the payment of the consideration under the Offer.
Erlinghundra AB has agreed not to sell or otherwise dispose of such shares
prior to 31 December 2023. These undertakings have been agreed in connection
with Entain’s intention, subject to completion of the Offer, to retain the
services of Niklas Braathan, the current chairman of the board of Enlabs, to
develop the Entain group’s operations in the Baltic and Nordic regions and
its expansion into parts of Eastern Europe. The remuneration that Mr Braathen
is expected to receive under these arrangements would be consistent with the
remuneration packages of senior executives of the Entain corporate group in
accordance with Entain plc’s remuneration policy.

The Swedish Securities Council (Sw. Aktiemarknadsnämnden) has in its
statement AMN 2021:01 confirmed that the above contractual arrangements are in
compliance with the Takeover Rules.

Conditions to the Offer

Completion of the Offer is conditional on:

1.   the Offer being accepted to such an extent that Entain becomes the
owner of shares in Enlabs representing more than 90% of the total number of
shares of the Company (on a fully diluted basis);

2.   with respect to the Offer and the acquisition of Enlabs, receipt of all
necessary regulatory, governmental or similar clearances, approvals and
decisions, including from competition authorities and gaming authorities, in
each case on terms which, in Entain’s opinion, are acceptable;

3.   there being no circumstances, which Entain did not have knowledge of at
the time of the announcement of the Offer, having occurred which would have a
material adverse effect or could reasonably be expected to have a material
adverse effect on Enlabs’ sales, results, liquidity, equity ratio, equity or
assets;

4.   neither the Offer nor the acquisition of Enlabs being rendered wholly
or partially impossible or significantly impeded as a result of legislation or
other regulation, any decision of court or public authority, or any similar
circumstance, which is actual or can reasonably be anticipated, and which
Entain could not reasonably have foreseen at the time of the announcement of
the Offer;

5.   Enlabs not taking any action that is likely to impair the prerequisites
for making or completing the Offer;

6.   no information made public by Enlabs or disclosed by Enlabs to Entain
being inaccurate, incomplete or misleading in any material respect, and Enlabs
having made public all information which should have been made public by
Enlabs; and

7.   no other party announcing an offer to acquire shares in Enlabs on terms
more favourable to the shareholders of the Company than the Offer.

Entain reserves the right to withdraw the Offer in the event it becomes clear
that either of the above conditions is not satisfied or cannot be satisfied.
With regard to conditions 2.–7., however, such withdrawal will only be made
if the non-satisfaction is of material importance to Entain’s acquisition of
shares in Enlabs.

Entain reserves the right to waive, in whole or in part, one or more of the
conditions above, including with respect to condition 1. above, to complete
the Offer at a lower level of acceptance.

Financing

The Offer is not subject to any financing condition. Entain plc has undertaken
to finance the consideration under the Offer through available cash resources.

Due Diligence

Entain has conducted a confirmatory due diligence review of Enlabs in
connection with the preparation of the Offer. In connection with such review
Entain has received certain preliminary financial information concerning the
performance of Enlabs during fourth quarter 2020. Entain has been informed by
the board of Enlabs that Enlabs will announce this information in a separate
press release today.

Indicative timetable

The acceptance period of the Offer is expected to commence on or around 21
January 2021 and expire on or around 18 February 2021. An offer document
regarding the Offer is expected to be made public shortly before the
commencement of the acceptance period. Assuming that the Offer is declared
unconditional no later than on or around 23 February 2021, settlement is
expected to begin on or around 2 March 2021.

Entain reserves the right to extend the acceptance period of the Offer as well
as to postpone the date of settlement.

The acquisition of Enlabs will be filed with relevant gaming and competition
authorities. Regulatory approvals are expected to have been received prior to
the expiry of the acceptance period.

Compulsory acquisition and delisting

If Entain becomes the owner of more than 90% of the shares of Enlabs, Entain
intends to initiate a compulsory acquisition procedure in respect of the
remaining shares in the Company under the Swedish Companies Act (Sw.
aktiebolagslagen (2005:551)). In connection therewith, Entain will act in
furtherance of a delisting of the Enlabs shares from Nasdaq First North.

Entain plc and Bwin Holdings (Malta) Limited in brief

Entain PLC (LSE:ENT) is a constituent member of the FTSE100 index of companies
and is one of the world’s largest sports-betting and gaming groups,
operating both online and in the retail sector. The group owns a comprehensive
portfolio of established brands; sports brands include bwin, Coral,
Crystalbet, Eurobet, Ladbrokes, Neds and Sportingbet; gaming brands include
CasinoClub, Foxy Bingo, Gala, Gioco Digitale, partypoker and PartyCasino. The
group owns proprietary technology across all of its core product verticals and
in addition to its B2C operations provides services to a number of third-party
customers on a B2B basis. The group has also entered into a joint-venture with
MGM Resorts to capitalise on the sports-betting and gaming opportunity in the
US. The group is tax resident in the UK with licences in more than 20
countries, across five continents. Entain plc’s shares are listed on the
London Stock Exchange. Further information about Entain plc is available at
www.entaingroup.com.

Bwin Holdings (Malta) Limited is a wholly-owned subsidiary of Entain plc and
is domiciled in Malta with its registered office at Penthouse, Palazzo Spinola
Business Centre, Number 46, St Christopher Street, Valletta VLT 1464 Malta.
Bwin Holdings (Malta) Limited’s corporate identity number is C59121 and it
is a holding company of various subsidiaries within the Entain plc group. Its
business objective is to acquire and hold assets, including interests in
companies, within the Entain plc group.

Governing law and disputes

The Offer, as well as the agreements entered into between Entain and the
Enlabs shareholders as a result of the Offer, shall be governed by and
construed in accordance with substantive Swedish law. Any dispute regarding
the Offer, or which arises in connection therewith, shall be exclusively
settled by Swedish courts, and the City Court of Stockholm (Sw. Stockholms
tingsrätt) shall be the court of first instance. The Takeover Rules and the
Swedish Securities Council’s rulings and statements on the interpretation
and application of the Takeover Rules, including, where applicable, the
Swedish Securities Council’s rulings and statements on the interpretation
and application of the formerly applicable Rules on Public Offers for the
Acquisition of Shares issued by the Swedish Industry and Commerce Stock
Exchange Committee (Sw. Näringslivets Börskommitté), are applicable to the
Offer.

Advisers

Entain has retained Lazard as financial adviser and Mannheimer Swartling and
Cobalt as legal advisers.

For further information, please contact:

Entain plc
Investor Relations,
David Lloyd-Seed, Director of Investor Relations & External Communications
investors@entaingroup.com

Media
Tessa Curtis, Head of Media Relations
Jay Dossetter, Head of ESG and Press Office
media@entaingroup.com
tessa.curtis@entaingroup.com
jay.dossetter@entaingroup.com

Powerscourt
Rob Greening / Elly Williamson
Tel: +44 (0) 20 7250 1446
entain@powerscourt-group.com

Information about the Offer is made available at: www.entaingroup.com

__________

Entain discloses the information provided herein pursuant to the Takeover
Rules. The information was submitted for publication on 7 January 2021, 8.00
a.m. CET.

Enlabs in brief

Enlabs owns and manages companies that are active in the gaming and media
sector. The Company creates entertainment in three business areas namely
gaming, media and solutions. Gaming, online casinos and land-based gaming
stores operate under prime brands such as Optibet and NinjaCasino. The firm's
products are casino, betting, poker, bingo, fantasy and virtual sports. Within
the media segment, Enlabs conducts performance-based marketing towards the
online gaming sector whereas, in the solutions business area, the Company's
B2B operations include service for sports results and technology solutions.
The Company generates a significant majority of its revenue from the gaming
area. The operating subsidiaries hold national licences for their operations
and the group employs approximately 330 employees. The corporate group has
offices in Tallinn, Riga, Vilnius, Malta, Marbella, Minsk and Stockholm.
Enlabs’ shares are listed on the Nasdaq First North under ticker symbol
NLAB.

Important information

The Offer is not being made, directly or indirectly, in or into Australia,
Canada, Hong Kong, Japan, New Zealand or South Africa by use of mail or any
other communication means or instrumentality (including, without limitation,
facsimile transmission, electronic mail, telex, telephone and the Internet) of
interstate or foreign commerce, or of any facility of national securities
exchange or other trading venue, of Australia, Canada, Hong Kong, Japan, New
Zealand or South Africa, and the Offer cannot be accepted by any such use or
by such means, instrumentality or facility of, in or from, Australia, Canada,
Hong Kong, Japan, New Zealand or South Africa. Accordingly, this press release
or any documentation relating to the Offer are not being and should not be
sent, mailed or otherwise distributed or forwarded in or into Australia,
Canada, Hong Kong, Japan, New Zealand or South Africa.

This press release is not being, and must not be, sent to shareholders with
registered addresses in Australia, Canada, Hong Kong, Japan, New Zealand or
South Africa. Banks, brokers, dealers and other nominees holding shares for
persons in Australia, Canada, Hong Kong, Japan, New Zealand or South Africa
must not forward this press release or any other document received in
connection with the Offer to such persons.

The Offer, the information and documents contained in this press release are
not being made and have not been approved by an authorised person for the
purposes of section 21 of the UK Financial Services and Markets Act 2000 (the
“FSMA”). The communication of the information and documents contained in
this press release is exempt from the restriction on financial promotions
under section 21 of the FSMA on the basis that it is a communication by or on
behalf of a body corporate which relates to a transaction to acquire day to
day control of the affairs of a body corporate; or to acquire 50 per cent or
more of the voting shares in a body corporate, within article 62 of the UK
Financial Services and Markets Act 2000 (Financial Promotion) Order 2005.

Statements in this press release relating to future status or circumstances,
including statements regarding future performance, growth and other trend
projections and other benefits of the Offer, are forward-looking statements.
These statements may generally, but not always, be identified by the use of
words such as “anticipates”, “intends”, “expects”, “believes”,
or similar expressions. By their nature, forward-looking statements involve
risk and uncertainty because they relate to events and depend on circumstances
that will occur in the future. There can be no assurance that actual results
will not differ materially from those expressed or implied by these
forward-looking statements due to many factors, many of which are outside the
control of Entain. Any such forward-looking statements speak only as of the
date on which they are made and Entain has no obligation (and undertakes no
such obligation) to update or revise any of them, whether as a result of new
information, future events or otherwise, except for in accordance with
applicable laws and regulations.

Special notice to shareholders in the United States

The Offer described in this press release is made for the issued and
outstanding shares of Enlabs, a company incorporated under Swedish law, and is
subject to Swedish disclosure and procedural requirements, which may be
different from those of the United States. The Offer is made in the United
States pursuant to Section 14(e) of the U.S. Securities Exchange Act of 1934,
as amended (the “U.S. Exchange Act”) and Regulation 14E thereunder, to the
extent applicable, and otherwise in compliance with the disclosure and
procedural requirements of Swedish law, including with respect to withdrawal
rights, the Offer timetable, notices of extensions, announcements of results,
settlement procedures (including as regards to the time when payment of the
consideration is rendered) and waivers of conditions, which may be different
from requirements or customary practices in relation to U.S. domestic tender
offers. Holders of the shares of Enlabs domiciled in the United States (the
“U.S. Holders”) are encouraged to consult with their own advisors
regarding the Offer.

Enlabs’ financial statements and all financial information included herein,
or any other documents relating to the Offer, have been or will be prepared in
accordance with IFRS and may not be comparable to the financial statements or
financial information of companies in the United States or other companies
whose financial statements are prepared in accordance with U.S. generally
accepted accounting principles. The Offer is made to the U.S. Holders on the
same terms and conditions as those made to all other shareholders of Enlabs to
whom an offer is made. Any information documents, including the offer
document, are being disseminated to U.S. Holders on a basis comparable to the
method pursuant to which such documents are provided to Enlabs’ other
shareholders.

The Offer, which is subject to Swedish law, is being made to the U.S. Holders
in accordance with the applicable U.S. securities laws, and applicable
exemptions thereunder. To the extent the Offer is subject to U.S. securities
laws, those laws only apply to U.S. Holders and thus will not give rise to
claims on the part of any other person. The U.S. Holders should consider that
the Offer Price is being paid in SEK and that no adjustment will be made based
on any changes in the exchange rate.

It may be difficult for Enlabs shareholders to enforce their rights and any
claims they may have arising under the U.S. federal or state securities laws
in connection with the Offer, since Enlabs and Entain are located in countries
other than the United States, and some or all of their officers and directors
may be residents of countries other than the United States. Enlabs
shareholders may not be able to sue Enlabs or Entain or their respective
officers or directors in a non-U.S. court for violations of U.S. securities
laws. Further, it may be difficult to compel Enlabs or Entain and/or their
respective affiliates to subject themselves to the jurisdiction or judgment of
a U.S. court.

To the extent permissible under applicable law or regulations, Entain and its
affiliates or its brokers and its brokers’ affiliates (acting as agents for
Entain or its affiliates, as applicable) may from time to time and during the
pendency of the Offer, and other than pursuant to the Offer, directly or
indirectly purchase or arrange to purchase shares of Enlabs outside the United
States, or any securities that are convertible into, exchangeable for or
exercisable for such shares. These purchases may occur either in the open
market at prevailing prices or in private transactions at negotiated prices,
and information about such purchases will be disclosed by means of a press
release or other means reasonably calculated to inform U.S. Holders of such
information. In addition, the financial advisors to Entain may also engage in
ordinary course trading activities in securities of Enlabs, which may include
purchases or arrangements to purchase such securities as long as such
purchases or arrangements are in compliance with the applicable law. Any
information about such purchases will be announced in Swedish and in a
non-binding English translation available to the U.S. Holders through relevant
electronic media if, and to the extent, such announcement is required under
applicable Swedish or U.S. law, rules or regulations.

The receipt of cash pursuant to the Offer by a U.S. Holder may be a taxable
transaction for U.S. federal income tax purposes and under applicable U.S.
state and local, as well as foreign and other, tax laws. Each shareholder is
urged to consult an independent professional adviser regarding the tax
consequences of accepting the Offer. Neither Entain nor any of its affiliates
and their respective directors, officers, employees or agents or any other
person acting on their behalf in connection with the Offer shall be
responsible for any tax effects or liabilities resulting from acceptance of
this Offer.

NEITHER THE U.S. SECURITIES AND EXCHANGE COMMISSION NOR ANY U.S. STATE
SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED THE OFFER, PASSED ANY
COMMENTS UPON THE MERITS OR FAIRNESS OF THE OFFER, PASSED ANY COMMENT UPON THE
ADEQUACY OR COMPLETENESS OF THIS PRESS RELEASE OR PASSED ANY COMMENT ON
WHETHER THE CONTENT IN THIS PRESS RELEASE IS CORRECT OR COMPLETE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENCE IN THE UNITED STATES.



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