- Shares gain on activist board appointment
- Eminence Capital has criticised the board
- Urging Entain to sell MGM Resorts joint venture
Shares in Ladbrokes and Coral owner Entain (ENT) moved 2% higher on Wednesday to £10 after appointing Eminence Capital founder Jerry Sandler to its board as a non-independent director.
Sandler’s appointment will also see him become a member of Entain’s People and Governance and Capital Allocation committees.
The positive share price reaction reflects hopes the activist investor will provide some direction and improve the performance of the business following the abrupt departure of CEO Jette Nygaard-Anderson on 13 December.
The resignation followed Entain’s £585.5 million settlement of a Crown Prosecution Case relating to historic activities in Turkey undertaken by prior management.
Commentating on his appointment Sandler said: ‘Entain is a robust business with market-leading brands, a unique technology platform, and enviable positions in key geographies around the world.
‘I look forward to working with my fellow directors to help Entain achieve long-term success and create lasting value for its shareholders.’
WHAT DOES EMINENCE CAPITAL WANT?
Eminence has reportedly held shares in Entain since 2020 and regularly held talks with management about maximising shareholder value.
Sandler wrote an open letter to Entains’ board in June 2023 criticising the company’s £750 million acquisition of STS Poland which was part funded by issuing new shares.
‘While we can support the company pursuing seemingly rational acquisitions, funding them with highly undervalued equity is an empire building, shareholder value destroying strategy’ Sandler said at the time.
‘Further, the Entain board has previously rejected multiple takeover approaches at materially higher prices on the grounds that those offers undervalued the company, but then turn around and issue equity at depressed prices for an asset that is at best a ‘nice to have’ is illogical.’
The remarks refer to Entain rejecting takeover offers from its US joint venture partner MGM Resorts International (MGM:NYSE).
In January 2021 Entain turned down a takeover offer form MGM pitched at £13.85 per share. Sandler has urged Entain to sell all or part of its share in the US joint venture with BetMGM.
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