Entain Mulls Multiple Asset Sale to Placate Activist Investors

Posted on: March 14, 2024, 09:46h. 

Last updated on: March 14, 2024, 11:08h.

British online gambling giant Entain is looking to offload an assortment of its overseas brands as it seeks to pacify activist investors by focusing on its core operations.

Entain, PartyPoker, BetCity, Enlabs, Ladbrokes Australia, and CrystalBet, Ricky Sandler
Eminence Capital founder Ricky Sandler, above, has been among the most critical of activist investors, and now sits on Entain’s recently established capital allocation committee. (Image: Reuters)

Activists believe a leaner Entain would be in a better position to be sold or broken up. In 2021, the company received takeover bids from DraftKings and MGM, its joint venture partner in BetMGM. Both offers valued the group at a much higher price than its current market cap.

The company has hired financial advisory firm Moelis to oversee the potential asset sale. That could include Netherlands-based BetCity, Sweden-based Enlabs, Ladbrokes Australia, and Georgia-based CrystalBet, The Financial Times reports.

These are all brands that don’t use Entain’s proprietary technology platform. Entain hopes a sale would allow it to focus on core markets, such as the UK and Germany.

Dissenting Voices

The news comes two days after Sky News reported Entain was working with advisers from Oakvale Capital on a possible sale of the once-mighty PartyPoker brand.

Activists have built an increasingly prominent position in Entain, and have expressed frustration with the company’s recent performance. That’s while questioning a series of misfiring acquisitions and missed opportunities.

Entain spent around $2 billion on largely regional-market acquisitions under former CEO Jette Nygaard-Andersen, which ultimately hurt the company’s share price. Entain’s shares are currently at a four-year low. Nygaard-Andersen stepped down last December amid rumors of “internal unrest.”

Last year, Entain established a capital allocation committee to pacify activist investors. One of the most vocal of these, Eminence Capital founder Ricky Sandler, has a seat on the committee.

Party Pooper

Meanwhile, PartyPoker, which operates in North America in the New Jersey, Pennsylvania, Michigan, and Ontario markets, as well as in numerous regulated markets worldwide, also appears to be surplus to requirements.

PartyPoker was once the biggest online poker site in the world. In 2005, it floated on the London Stock Exchange for £5 billion, then around US$9.1 billion. A year later, it withdrew from the U.S. market after Congress passed the Unlawful Internet Gambling Enforcement Act, which sent its share price tumbling.

PartyPoker never quite recovered, and has been losing ground to competitors like PokerStars and GGPoker ever since. In 2011, it merged with bwin to become bwin.party, which was acquired by Entain, then known as GVC Holdings, in 2016 for £1.1 billion (then US$1.6 billion).

PartyPoker is expected to sell for around £150 million ($US191 million).