Cherry AB receives $1 billion takeover offer

News on 18 Dec 2018

Cherry AB’s Independent Bid Committee (IBC) said in an industry update Tuesday that it recommends shareholders accept a public offer from the European Entertainment Intressenter Bid Co AB of SEK87 per series A and B share which based on all shares of series A and B in Cherry, corresponds to approximately SEK 9,193 million ($1,016,965,512 or GBP 802,273,110).  The share offer represents a 20 percent premium on the closing price of Series B shares on December 17, 2018.

The IBC also noted that the Offer corresponds to a premium of 28.0 percent compared to the volume-weighted average share price of Cherry’s series B shares on Nasdaq Stockholm during the last 90 trading days and 59.6 percent compared to the closing price on 15 October 2018, the day before the Board of Directors received the letter by which the Consortium presented its non-binding bid.

EE Intressenter is a company jointly controlled by a consortium consisting of Bridgepoint Advisers Limited acting as managers for and on behalf of the limited partnerships comprising the Bridgepoint Europe VI Fund, Prunus Avium Ltd, Klein Group AS, Audere Est Facere AS, Pontus Lindwall, Berkay Reyhan and Can Yilanlioglu (Consortium).

The acceptance period for the Offer is expected to commence around 20 December 2018 and expire around 23 January 2019, subject to any extensions.

Completion of the Offer is conditional upon customary terms, including the Offer being accepted to such extent that the consortium becomes the owner of more than 90 percent of the total number of outstanding shares in Cherry.

Members of the Consortium currently own in aggregate 50,100,368 shares, corresponding to approximately 47.4 percent of the total number of shares and 37.9 percent of the total number of votes in the Company.

In addition, irrevocable undertakings to accept the Offer, subject to certain conditions, have been received from shareholders representing in total 12,298,332 shares, corresponding to approximately 11.6 percent of the total number of shares and 28.5 percent of the total number of votes in Cherry.

In total, therefore, the Consortium owns shares, or have secured commitments to accept the Offer, corresponding to 59.1 per cent of the capital and 66.5 per cent of the votes.

Chairman of the Cherry AB Board, Morten Klein, is part of the bidding Consortium.

Noting the upcoming regulation of the Swedish gambling market, the IBC highlighted increased consolidation between market players, such as William Hill’s bid on MRG at the end of October (see previous reports).

The consortium said in a separate press statement that it believes Cherry will be able to maximise value by focusing on driving the performance of the individual business units rather than managing the combined entity as a publicly listed company.

In addition, the consortium noted it places great value on Cherry’s management and employees and expect that the Offer will support continued growth and create long-term positive effects for Cherry and its employees, customers and other stakeholders impacted by the operations of Cherry.

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