EveryMatrix, a well-known iGaming software provider, has made a public offer to acquire the entirety of shares in Sweden-based Fantasma Games AB, a specialist in developing online casino games. The offer is priced at SEK 59 ($5.79) per share in cash, valuing the company at approximately SEK 209.8 million. This proposal represents a significant 21.4% premium compared to Fantasma’s closing share price of SEK 48.60 on September 17, 2024, the last trading day before the acquisition announcement.
The deal has generated attention for a variety of reasons, including its substantial premiums over Fantasma’s recent trading prices and the endorsement of the company’s independent bid committee.
Market Expansion and Content Enrichment
For EveryMatrix, acquiring Fantasma Games presents a valuable opportunity to enhance its presence in the rapidly growing iGaming market, particularly in Europe. Fantasma Games is known for developing high-quality online casino games, a critical area where EveryMatrix has been expanding its portfolio through both partnerships and acquisitions.
One recent example of EveryMatrix’s content expansion efforts is its partnership with Peter & Sons, a game studio whose titles have been integrated into EveryMatrix’s CasinoEngine platform. The acquisition of Fantasma Games further complements this strategy by allowing EveryMatrix to directly control the production and distribution of premium casino content.
Strengthening Proprietary Content
EveryMatrix has increasingly focused on building its proprietary content library as a competitive advantage in the iGaming space. Owning innovative studios like Fantasma Games helps EveryMatrix secure exclusive content that can attract more operators and players to its platforms. The acquisition supports the company’s long-term strategy of content diversification, making it less reliant on third-party providers.
Boosting Competitive Position
With iGaming markets becoming more crowded and competitive, acquiring established game developers allows larger platforms like EveryMatrix to differentiate themselves by offering unique and diverse content. Fantasma Games has developed a reputation for innovative game mechanics and high-quality graphics, making it an attractive addition to EveryMatrix’s portfolio. By integrating Fantasma’s games, EveryMatrix can strengthen its competitive edge against other iGaming platforms and aggregators.
Independent Bid Committee’s Endorsement
The independent bid committee of Fantasma Games, comprising board members Antonia Svensson, Johan Styren, and Johan Köningslehner, has recommended that shareholders accept EveryMatrix’s offer. The committee’s recommendation is based on a thorough financial analysis, supported by the expertise of financial advisors from Svalner Skatt & Transaktion KB.
Fairness Opinion
Svalner Skatt & Transaktion KB, a well-regarded financial advisory firm, provided a fairness opinion to the independent bid committee. Their assessment concluded that EveryMatrix’s offer is fair from a financial perspective, considering the premiums offered over the recent trading prices of Fantasma’s shares.
Committee’s Role in Protecting Shareholders’ Interests
The endorsement of the bid by Fantasma’s independent committee suggests that the offer aligns with shareholders’ interests, ensuring that they receive a fair price for their shares. It also reassures minority shareholders that the decision-making process was transparent and conducted with proper oversight.
Shareholder Agreements and Conditions for the Deal
A key milestone in the acquisition process is the agreement from major shareholders controlling 50.79% of Fantasma’s shares to accept the offer, contingent on certain conditions. These shareholders include prominent individuals and entities such as Fredrik Johansson and KL Capital AB.
90% Acceptance Threshold
For the acquisition to proceed, EveryMatrix must secure more than 90% of Fantasma’s shares. Achieving this threshold is crucial as it would allow EveryMatrix to initiate a compulsory buyout of any remaining shares and potentially delist Fantasma from the Nasdaq First North Growth Market.
The backing of over 50% of the shareholders gives EveryMatrix a strong foundation, but reaching the 90% threshold will require support from a significant portion of minority shareholders.
Regulatory Approvals and Customary Conditions
In addition to shareholder approval, the completion of the acquisition is subject to regulatory clearances and other customary conditions. Regulatory bodies will review the transaction to ensure that it complies with competition laws and other relevant regulations. EveryMatrix will need to navigate these legal processes before the deal can be finalized.
Acceptance Period and Potential for Extension
The acceptance period for the offer is scheduled to run from September 19 to October 10, 2024. During this period, shareholders have the opportunity to evaluate the offer and decide whether to accept it. However, EveryMatrix has reserved the right to extend the acceptance period if necessary.
Flexibility to Extend
If EveryMatrix is unable to secure the required 90% of shares by the October 10 deadline, it can choose to extend the acceptance period. This would provide more time to engage with shareholders who may be on the fence about the offer. However, prolonging the process could also introduce uncertainties and potential risks, such as market fluctuations or regulatory hurdles.
Impact on Shareholder Decision-Making
The set acceptance period creates a sense of urgency for shareholders to make their decision, especially considering the premium being offered. Shareholders will need to weigh the potential benefits of accepting the offer now versus holding out for possible future gains or a different strategic direction for Fantasma.
Market Reactions and Implications
The announcement of EveryMatrix’s offer has likely generated interest within both the financial and iGaming communities. Fantasma’s listing on the Nasdaq First North Growth Market means that the acquisition could have broader implications for similar companies listed on the exchange, especially those operating in the dynamic iGaming sector.
Premium as a Motivator
The 21.4% premium offered by EveryMatrix may encourage shareholders to view the deal favorably, as it offers immediate financial benefits compared to holding onto their shares in a highly competitive and volatile market. Moreover, the 27.7% and 33.4% premiums over the 30-day and 90-day volume-weighted averages suggest that the deal provides considerable value beyond short-term market fluctuations.
Industry Consolidation Trends
The acquisition of Fantasma Games by EveryMatrix could be seen as part of a broader trend of consolidation within the iGaming industry. As competition increases, larger platforms are acquiring smaller but innovative studios to bolster their portfolios and stay ahead of rivals. This trend is expected to continue, with companies seeking to strengthen their market positions through mergers and acquisitions.
Investor Outlook
Investors in both EveryMatrix and Fantasma will be closely watching how this acquisition unfolds. For Fantasma’s shareholders, the decision to accept or reject the offer hinges on whether they believe the offered premium adequately reflects the company’s growth potential. On the other hand, investors in EveryMatrix may view the deal as a positive step in the company’s expansion, potentially boosting its valuation and market presence.
EveryMatrix’s public offer to acquire Fantasma Games at SEK 59 per share reflects the company’s strategic focus on expanding its iGaming content offering and securing a strong position in the European market. The deal, valued at SEK 209.8 million, offers a significant premium to Fantasma’s shareholders, backed by the recommendation of the independent bid committee and a fairness opinion from financial advisors.
As the acceptance period unfolds, shareholders will need to weigh the offer against Fantasma’s future potential and current market conditions. With regulatory approvals and a 90% acceptance threshold still pending, the outcome of this acquisition could have lasting effects on both companies and the wider iGaming industry.