Genius Sports-Kambi Acquisition Rumours Dismissed as Shares React to Speculation

Rumours of an acquisition offer for Kambi by Genius Sports caused a stir earlier today (4 September), leading to a significant jump in Kambi's share price, which peaked at SEK132.70—up 17.5% from the opening.

However, both Kambi and Genius Sports swiftly released statements refuting the claims, dampening the speculation.

Kambi's chairman, Anders Ström, was quick to deny the rumours, stating, "While Kambi tends not to comment on rumour and speculation, I can confirm that Kambi is not engaged in any such discussions."

Similarly, Genius Sports CEO Mark Locke dismissed the reports, emphasizing, "As policy, we do not comment on unfounded and ill-informed rumours. To prevent any further speculation, we can confirm that we are not involved in any discussions of this nature with Kambi."

Following these denials, Kambi's share price adjusted down to SEK117.70, reflecting a modest increase of just 2.8% from the day's opening price of SEK112.90.

Genius Sports also saw a decline, with its shares dropping from an opening price of $7.15 to $7.03 on the New York Stock Exchange, which began trading at 2:00 pm BST.

Industry insiders and analysts weighed in on the rumours, expressing skepticism about the potential merger's value for Kambi at this time.

One industry source suggested the timing of such a deal would be ill-advised given Kambi's current transition under its new CEO, Werner Becher, who took over in July.

"It seems like a bankers' deal and not one that Kambi, which is just embarking on a new journey with a new CEO, should even think about at this stage," the source told iGB.

Despite the dismissal of the merger rumours, analysts at ABG Sunder Collier highlighted Kambi as an appealing acquisition target for operators seeking to bring sportsbook technology in-house.

They noted Kambi's strengths, including its proven product, in-house premium bet builder, and leadership in AI trading.

The analysts believe that the company's well-invested tech could attract interest at a significantly higher price than its current enterprise value (EV) of €187 million or 3.4x EBITDA.

Looking ahead, Kambi views 2024 as a transitional year with revenue expected to range between €170 million and €180 million, impacted by factors such as the Penn migration and recent contract renewals with Kindred and other clients.

Additionally, the delayed opening of Brazil's regulated market has slowed growth, although Kambi anticipates gradually increasing its market share once the market opens in January 2025.

Meanwhile, Genius Sports continues to expand its presence in the sports data industry, recently extending its live betting data deal with Football DataCo, the holder of UK football rights, through 2029.

This agreement will introduce new pre-game and in-play player markets from the 2025-26 season.

Genius Sports has also raised its financial forecast for 2024, now projecting $500 million in revenue and adjusted EBITDA of $82 million, up from initial estimates of $480 million and $75 million, respectively.

Despite the recent volatility in share prices, both Kambi and Genius Sports appear focused on their strategic plans and growth trajectories.