Meister’s Corvex Takes Five Percent Stake in Kindred

Posted on: February 17, 2022, 12:14h. 

Last updated on: February 17, 2022, 01:11h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

Kindred Group, the Swedish online gaming operator, announced today Keith Meister’s Corvex Management owns more than 5 % of the wagering company.

Kindred
Corvex Management founder Keith Meister, seen here in 2015. His hedge fund took a 5.29 percent stake in Kindred. (Image: CNBC)

The Stockholm-listed firm updates investors whenever a professional investor buys or sells stakes equivalent to five percent or more of the operator’s voting rights.

According to the notification, Corvex Management LP owns 5.29 percent of the shares and voting rights in Kindred as of Feb. 11,” said the company in a statement.

The New York-based hedge fund is the latest big-name, high-level investor to invest in the owner of the 32Red, Bingo.com, Otto Casino, and Unibet brands. Last September, Kindred revealed Capital Group, the parent company of the American Funds family of mutual funds, upped its position in the betting firm, to 10.53 %.

Kindred trades in Stockholm under the ticker “KIND.”

Corvex Kindred Involvement Could Be Interesting

There’s a big difference between the Capital Group and Corvex investments in Kindred.

The former is a passive investor, while Meister’s hedge fund is known as an activist investor — one that often pushes for change at the companies it takes stakes in. That’s exactly what Meister did at MGM Resorts International (NYSE:MGM). He joined that company’s board in 2019 and was one of the driving forces of the casino giant’s asset-lite strategy that includes monetizing its substantial real estate assets.

In fact, news of his investment in Kindred arrives just days after MGM and Barry Diller’s IAC/InterActiveCorp (NASDAQ:IAC) agreed to buy $405 million worth of the casino operator’s shares from Corvex, reducing the hedge fund’s stake to 1.5 % of the shares outstanding.

It’s not immediately clear what change — if any — Corvex is angling for at Kindred. It’s not a stretch for Meister’s investment firm to add a position in a company like Kindred because he’s previously spoken bullishly on the iGaming and sports betting opportunity sets.

At the end of last year, Corvex owned shares of MGM, Sportsradar (NASDAQ:SRAD) and put options on Wynn Resorts (NASDAQ:WYNN).

Takeover Possible?

Like so many sports betting companies, Kindred has spent time as the center of takeover talk. But that chatter amounted to no more than rumors. It’s possible Meister could push the company to sell itself. But that’s speculation for now.

To its credit, Kindred has some exposure to the US, the fastest-growing sports wagering market in the world.

The Unibet brand holds licenses in Arizona, Indiana, Iowa, New Jersey, Pennsylvania, and Virginia, according to the Kindred website. Across sports wagering, iGaming, poker, and bingo, Kindred believes the global markets for those segments will sport nine percent compound annual growth through 2025.

By its account, Kindred is the fourth-largest online gaming operator in the world, as measured by gross winnings revenue.