8th Apr 2024 11:01
(Alliance News) - Entain PLC shot to the top of the FTSE 100 leader board on Monday after The Sunday Times reported it was considering its options for a number of assets, reigniting bid speculation.
Shares in Entain climbed 4.2% to 816.80 pence each in London on Monday morning.
The bookmaker, which owns Ladbrokes and Coral, has called on investment bank Moelis to help with a review of its brands, the report claimed.
The future of "a whole range" of assets are under consideration, The Sunday Times reported, citing sources.
The Sunday Times said that a number of buyout firms, including the likes of Apollo Global Management Inc and CVC Capital Partners, are watching on with interest. The latter already has a hand in the gambling market, as it owns German bookmaker Tipico.
AJ Bell investment director Russ Mould noted Entain has previously been "subject to interest from MGM and DraftKings, but neither suitor managed to place a winning bid."
"Since then, Entain’s share price has lagged many of its peers and left it a sitting duck for a third party to swoop on the business," he suggested.
In February 2023, casino operator MGM Resorts ruled out mounting a second takeover bid for Entain. MGM, operator of the Las Vegas Bellagio casino, first made a bid for Entain in January 2021, offering shareholders equity in MGM that valued Entain at around GBP8 billion, or 1,383p per share.
The offer was rejected by shareholders.
In September 2021, Entain received takeover interest from the US yet again, with New York-listed Draftkings Inc making a cash and shares offer for the bookmaker.
In October of that year, Draftkings decided against making a firm offer.
Entain is particularly vulnerable at the moment as the business is being run by a caretaker manager while the board searches for a permanent chief executive, Mould pointed out.
"Expect a few twists and turns if the starting gun is fired again on any bid action as there will no doubt be multiple parties interested in picking apart Entain. It already has multiple activist investors on the shareholder register and they won’t let someone casually waltz along and snap it up on the cheap," he remarked.
"Scale matters in the gambling sector and Entain has its fingers in many pies around the world, including the US which offers some of the best growth opportunities geographically for the industry," he pointed out.
Entain on Thursday had said that Chair Barry Gibson has chosen to step down from his position by the end of September, having served in the role since February 2020.
Stella David, interim CEO of Entain since December, will replace Gibson as chair following his departure.
The Sunday Times said the departure of Gibson, who had been key in Entain fending off a takeover tilt from US joint-venture partner MGM Resorts International, could leave it "vulnerable" to more M&A interest.
Gibson may step down earlier than September, Entain said on Thursday, depending on the timing and appointment of a new CEO.
Entain said that the search for a permanent CEO, following the departure of Jette Nygaard-Andersen in December, is "ongoing and is progressing well".
Nygaard-Andersen's departure came after the company agreed to pay GBP585 million to HMRC to settle an investigation concerning alleged bribery at its Turkish businesses between 2011 and 2017.
By Jeremy Cutler, Alliance News reporter
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