Kindred becomes a target of Corvex activist fund

By | May 4, 2022

Activist investment fund Corvex Management LP has disclosed to the Stockholm Nasdaq that it has built up a 10% shareholding in Kindred Group Plc.

Corvex is led by seasoned activist investor Keith Arlyn Meister, a former principal of Icahn Enterprises – the private investment fund of US finance magnate Carl Icahn.

The New York fund began to accumulate its 10% shareholding in Kindred Group as of February 2022, a move in which it believes that the online gambling group ‘has built a strategic position in the rapidly growing global online gaming space’. 

Issuing a statement to Kindred investors, Corvex underlined that it had ‘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’.

Last week, Kindred published its Q1 trading results, registering a 77% decline in EBITDA to £247 million. This performance was attributed to ‘short-term European headwinds applying pressure’ on the group’s profit-making capacities.

Despite its statement that it had no pre-judged outcome for its investment, Corvex has recommended that the Kindred Board ‘immediately retain a leading, global financial advisor to evaluate strategic alternatives, including the potential value that could be achieved through a sale or business combination’.

Kindred maintains confidence in the group’s long-term growth strategy, as the business reinvests earnings to enlarge its proprietary tech units and targets ‘sustainable organic growth’ within North American markets against high spending competition.

As it stands, Corvex has become the second-largest investor in Kindred Group behind North American PE fund Capital Group which holds a 15.2% shareholding equivalent to +35 million shares.

Corvex concluded: “A fully informed Board will be in the best position to weigh any strategic alternatives, compared with Kindred’s stand-alone business plan.

“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. We look forward to continuing to work with the Kindred team.”

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