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Shares of Kambi Group PLC lost 30 percent on Monday’s news that DraftKings planned to acquire SBTech. Investors fear the acquisition could threaten the current multi-state partnership between Kambi and DraftKings.
As a result, Kambi has made the move to halt trading in its shares. The company also issued a statement to ease investor concern.
“Kambi has today been made aware of DraftKings’ proposed deal. It is of course not up to me to comment on the strategic choices of DraftKings, but in this context I would like to emphasise that Kambi has successfully built a strong position in the US and our partner network consists of high-quality, visionary operators, both in the US and across the world,” said the statement released by Kambi Group’s CEO Kristian Nylen.
Nylen also said Kambi and DraftKings had recently signed a renewed deal and no notice of termination had yet been given.
“Kambi recently signed a renewed deal with DraftKings and, as per that agreement, we will continue to provide the same high levels of product and service that enabled DraftKings to become a leading player across multiple US states. No notice of termination has been given; should that type of information be given, we will inform the market.”
The news of the Kambi’s stock plunge comes after the announcement of a definitive business combination agreement being struck between Kambi’s US partner DraftKings and SBTech.
Kambi’s share price is particularly sensitive to SBTech-related news. Both companies provide back-end products and services to sportsbooks. DraftKings has become one of the most successful online sportsbooks, with a 30 percent US market share.
Back in June, several gambling media outlets speculated DraftKings was on the verge of buying SBTech, but just two months later, DraftKings announced it had expanded its partnership with Kambi. Specifically, the August agreement with Kambi included eight additional states; Colorado, Indiana, Iowa, Maine, New York, Pennsylvania, Tennessee, and West Virginia.
