An activist fund, Corvex Management, has acquired a 10 percent share in Stockholm-listed Kindred Group and is urging the company to hire an advisor to consider a sale or business combination.
The New York City-based hedge fund is led by Keith Meister, formerly chief executive of Icahn Enterprises, and it is an investor in US casino operator MGM Resorts.
Corvex said it has held “constructive conversations” with Kindred’s board and senior management.
“A fully informed board will be in the best position to weigh any strategic alternatives, compared with Kindred’s standalone business plan,” the company said in a statement.
“While we have not pre-judged any path for Kindred, we believe the board should possess all relevant market information and let the data drive the decision-making process,” Corvex said.
The announcement on Wednesday (May 4) follows MGM’s $607m offer earlier this week to buy LeoVegas, an online gambling rival to Kindred also listed in Stockholm.
MGM also has a joint venture with Entain called BetMGM.
Kindred shares rose 8.6 percent on Wednesday to 104 Swedish krona on Corvex’s announcement, leaving it with a market capitalisation of SEK21.9bn (€2.1bn).
Up to Wednesday, Kindred shares had halved from the end of September, largely due to its absence from the Dutch market, after the government there demanded that operators leave until they obtain a licence.
In response to Corvex’s statement, Kindred said that it is “recognised as a leading operator in the global online gambling sector and the board and management are fully committed to the group’s current strategic direction”.
“We are confident about the long-term opportunities for the company and value creation potential for all our shareholders,” said Kindred chair Evert Carlsson. “We welcome and look forward to continuing a constructive dialogue with all our shareholders going forward.”
In February, MGM Resorts and IAC each purchased 4.5m MGM shares from Corvex for a total of $405m.
Corvex retained nearly 6.7m shares, or 1.5 percent of the casino company.
Meister’s former associate, Carl Icahn, is probably the world’s best-known activist investor and is currently waging a proxy war with McDonald’s.