A major Enlabs shareholder said Monday that a group of investors holding a combined 10.7% in the company have indicated they will reject Entain’s bid for the company.

Alta Fox Capital Management is one of the largest shareholders of Enlabs AB and currently owns 2,332,625 shares, representing 3.34% of total shares outstanding. 

Alta Fox does not plan to tender any shares at Entain’s current offer price of 40 SEK per each Enlabs share.

This offer materially undervalues the company, represents a negligible premium of 1.1% to the pre-offer trading price, and has unusual circumstances that make us question why Enlabs’ Chairman, Niklas Braathen, accepted such an inadequate offer.

The fact that Entain will compensate Braathen as a senior executive post-deal and that the CEO of Entain just announced his departure is highly unusual. It leads us to conclude that while this is a good deal for Entain, it is a bad deal for Enlab’s minority shareholders. 

Alta Fox has retained legal counsel to protect our interests in this matter and has spoken with other large shareholders, a portion of which have signed in support of this letter and represent over 10% of total shares outstanding.