Sharks Circling as BetMGM Parent Company Entain CEO Head Potentially on Chopping Block

Written by:
Aaron Goldstein
Published on:
Dec/10/2023

BetMGM and Ladbrokes parent company Entain may have finalized a £585mn settlement with UK authorities to end a probe into alleged bribery at the gambling group’s former Turkish division, but the struggles for some may only be getting started it appears as the sharks smell blood.

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A languishing share price, rising regulatory pressure, the arrival of activist shareholders and mounting internal discontent have placed intense pressure over chief executive Jette Nygaard-Andersen.

Entain has been ordered to pay £615mn to resolve the bribery matter. The DPA with the Crown Prosecution Service was finalized in a London court early last week for a term of four years.

Dame Victoria Sharp, the judge presiding over the case, wrote as part of her judgement that Entain’s co-operation — and the fact that there has been a “wholesale change of senior management and approach” — were key to the company’s eligibility for a DPA.

Entain sold its Turkish business in December 2017, shortly before buying Ladbrokes Coral for £3.6bn.

“One significant factor in this conclusion is that Entain is, both in form and substance, a different entity to GVC,” said Sharp. “The prosecution of Entain would have disproportionate consequences.”

Entain said the offences under investigation included section seven of the Bribery Act 2010. The relevant section of the act relates to the failure of UK commercial organisations to prevent bribery anywhere that they carry out business.

The Financial Times on Sunday confirmed over 20 current and former Entain executives, advisers and investors they interviewed expressed growing dissatisfaction with the current leadership.

A 40 per cent share price slump since August has slashed its market capitalisation to £5.1bn, according to The Times.

They also point out that Entain regularly ranks fourth-worst in the FTSE 100 for shareholder returns.

From the Financial Times:

"Three US activist hedge funds, now among its top 20 shareholders, are sensing an opportunity: Eminence Capital, Sachem Head Capital Management and Dendur Capital. Another, P Schoenfeld Asset Management, has a smaller stake. All the activists declined to comment."

The news comes as BetMGM continues to insist it is targeting a core profit of $500 million in 2026 at its U.S. sports-betting service BetMGM, which it jointly owns with MGM Resorts (MGM.N).

- Aaron Goldstein, Gambling911.com

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