LeoVegas readies business changes ahead of shareholder vote on MGM offer
Malta-headquartered operator to withdraw shareholder dividends and incentive plan in anticipation of positive vote on $607m bid
LeoVegas has released details of a series of proposals aimed at preparing for the resolution of a $607m (£497.2m) bid to takeover the Malta-based operator by US casino giant MGM Resorts International.
The two headline proposals are the removal of an expected shareholder dividend and employee incentive programme ahead of the group’s annual general meeting, taking place on 19 May.
In respect of the shareholder dividend, LeoVegas has revealed that MGM will look to reduce the price per share offer if a shareholder dividend is paid prior to its completion.
LeoVegas’ shareholder dividend is typically distributed in four tranches, however its board of directors has suggested that the final price paid by MGM for the business will be “clearer and simpler” if no shareholder dividend is paid before any positive or negative shareholder vote.
In addition to its changes to the shareholder dividend, LeoVegas has proposed the withdrawal of its employee incentive programme, on the grounds that it would not serve its purpose and not be in the company’s best interests if MGM completes on its offer.
“In case MGM’s offer to the shareholders in LeoVegas is not completed, the board of directors intends to summon an extraordinary general meeting to resolve on dividend and implementation of an incentive programme,” LeoVegas said.
Tabled last month, MGM’s $607m offer for LeoVegas includes assurances that the US casino giant will make no material changes to LeoVegas’ current business structure once completed.
MGM has also committed to implementing a key employee incentive plan, the purpose of which is to keep key employees on board over the long term, and the plan will be offered to key employees regardless of whether they currently own shares in LeoVegas.
Eligible participants will be given the opportunity to choose between a bonus plan or participation by way of purchasing shares in MGM Casino Next Lion LLC (MGM’s acquiring entity) at market value.
LeoVegas CEO Gustaf Hagman and the rest of the mobile-casino operator’s board of directors have already given their ascent to the offer, recommending that other shareholders approve the bid.
In addition to the proposals regarding MGM’s offer, LeoVegas’ nomination committee has proposed that current LeoVegas chairman Per Norman be re-elected to a seven-member board of directors.
The remaining members of LeoVegas’ board will also be re-elected under proposals tabled, with a total board remuneration package of SEK3m (£230,000) in 2022.
This package is made up of payments to board members and committee directors based on their status within the firm.
A payment of SEK325,000 will be made to each of the non-employed directors serving on a committee, with SEK650,000 being paid to any non-employed committee chairman.
Non-employed members of LeoVegas’ remuneration committee will receive SEK50,000, rising to SEK100,000 for the chairman, with similar amounts being paid on the firm’s audit committee.
Global audit firm PricewaterhouseCoopers AB has also been proposed to be re-elected as the firm’s auditors.