Entain Leadership Changes Continue, BetMGM Divestment Possible

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Entain, the leading European gambling operator which also owns a 50% stake in BetMGM, has gone through several more leadership changes this week.

The news of a significant reshuffle in the company’s boardroom comes just a week after the sudden departure of former CEO Jette Nygaard-Andersen. Amidst this transition, the company has appointed Stella David as interim CEO, with Pierre Bouchut taking on the role of senior independent director.

UK news media also reported this week that Entain is soon expected to appoint Ricky Sandler of Eminence Capital to its board. Earlier this year, Eminence, who own 2% of Entain, criticized the operator’s decision to buy Polish sportsbook STS Holdings for $750 million.

Sandler felt that Entain should focus on its investment in BetMGM amid the booming U.S. gambling market, instead of spending big on European operations.

Entain also recently accepted a huge settlement fine from British authorities. The operator paid out more than $730 million over corruption allegations relating to its previous operations in Turkey, back when the company was known as GVC Holdings.

Leadership Changes at a Critical Junction

The departure of Nygaard-Andersen, with no clear reason given, has prompted a reshuffle of the wider Entain leadership.

Stella David stepped in as interim CEO until a permanent replacement is found in 2024. Other key new appointments include Pierre Bouchut becoming the senior independent director and Virginia McDowell and Rahul Welde taking new roles within the board committees.

Entain’s boardroom adjustments coincide with expectations of Sandler from Eminence Capital joining the board. This potential addition could mark a shift in direction for Entain, especially as it looks to move on from its hefty payout to the UK’s Crown Prosecution Service (CPS).

Potential MGM Buyout in the Cards

Sandler has previously proposed that Entain sell its interests in online betting operation BetMGM back to MGM Resorts International, the largest U.S. casino operator.

The appointment of Sandler could also placate newer Entain investors Dendur Capital and Sached Heam Capital, who have advocated for him to have an increased role at the company since they purchased significant interests in 2023.

MGM has tried to buy Entain as a company at least once in the past five years. But a suitable fee was never reached. On MGM’s side, the prospect of buying Entain out of its shares in BetMGM could be more appealing, as it would be significantly cheaper.

However, on Entain’s side, its investments in BetMGM are soon to approach the critical inflection point of being self-funded from profits. This would put Entain in the position of comfort, as BetMGM would finally be making them money with no more investment required.

These development also come not long after New York-based investment fund Corvex Management bought a 4.4% stake in Entain. Corvex is run by Keith Meister, who has significant investments in MGM and sits on their board.

Meister reportedly wanted to join Entain’s board as part of the investment deal. But that part of his bid was rejected by existing management.

U.S. online casino and sportsbook BetMGM made about $2 billion in revenue in 2023, and is on course for a profitable second-half of the year for the first time.

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