Entain board shake-up could prompt BetMGM stake sale

Article by : Charles Perrin Dec 19, 2023

• 
• 

Entain is contemplating a shake-up at board level in the wake of Jette Nygaard-Andersen’s departure that could accelerate the company’s plans to divest all or part of its 50% stake in BetMGM.

Last week, Nygaard-Andersen stepped down from her role as Entain CEO after a series of costly acquisitions and hostile criticism from investors over languishing share price.

Non-executive director Stella David has assumed the role on an interim basis, but Entain is now considering refreshing the board further following the recent upheaval.

Yes, Eminence Capital founder Ricky Sandler could be poised to join Entain on the board of directors, with unconfirmed reports suggesting a deal could be wrapped up before the end of the month.

Moreover, it has prompted speculation that Entain could open the door to the company rethinking the parameters of its deal with BetMGM.

Sandler has previously championed the idea of Entain selling all or part of its BetMGM stake to refocus on excelling in core markets, such as Europe and the UK.

Eminence Capital, meanwhile, owned just over 2% of Entain’s free-floating shares at the end of Q2 this year. Adding Sandler to the board could therefore be perceived as a carefully crafted move to appease the company’s other activist investors Dendur Capital and Sached Heam Capital.

Not only that but such news of a board change was fueled by US activist hedge fund Corvex Management, who recently acquired a 4.4% stake in Entain.

But as far as BetMGM is concerned, it is showing no signs of slowing down.

Over the past 12 months, the gambling giant has become increasingly profitable, and it has already targeted $500million in earnings before taxes, depreciation, amortization, and interest (EBITDA) by 2026.

MGM, which expanded its footprint into the UK in August, is also on track to obtain self-funding status. Should it achieve this, then it won’t require capital contributions from Entain in the future.

In stark contrast, it has been a turbulent past few months for Entain, and there are a lot of questions that remain unanswered.

Nevertheless, a board refresh could help them press the reset button and put the dismal era of Nygaard-Andersen behind them.