With the departure of CEO Jette Nygaard-Andersen, following a huge settlement over an investigation of bribery in a subsidiary that the company once owned in Turkey, British-based Entain is tossing aside and adding new board members. It might also be considering other dramatic actions, like selling off itself to MGM, said Jefferies analyst James Wheatcroft in a report to clients December 19.
The gambling group, whose brands Ladbrokes and Coral are very familiar to U.K. consumers, has named Stella David interim CEO, effective immediately, taking her from a non-executive director role.
This has led to considerable shuffling of board members, such as the appointment of board member Pierre Bouchut as a senior independent director, to replace David. Bouchut has more than four decades in senior management roles in finance, European retail and European property.
Virginia McDowell was named chairman of the Remuneration Committee, Group Chairman Barry Gibson added the chairmanship of the People and Governance Committee and Rahul Welde added to the same committee.
Meanwhile, Wheatcroft noted he rates the stocks of the company, after taking a pounding, up from “hold” to “buy” and added, “We would expect other options to include the sale of Entain to MGM, the sale of the BetMGM stake, the sale of other assets, in addition to finding a suitable CEO … Several factors now imply an opportune moment for MGM to re-evaluate an approach to Entain.”
Three years ago MGM Resorts International bid $11.06 billion in cash and stock for Entain but the bid was turned down as inadequate. In the meantime Entain’s market cap has declined dramatically to $7.89 billion. For its part, MGM is saying publicly that it’s unlikely to make such a bid in the near future.
Wheatcroft is bullish on Entain and considers the odds good “for a highly credible CEO to land at Entain.”
His opinion is bolstered by the pending appointment of Eminence Capital founder Ricky Sandler to the gaming company’s board of directors. This is likely to happen by the end of December. He is likely to have a large role in filling other director’s seats, and to have a major say in picking a CEO. He has previously advocated that Entain sell off its share of its joint venture BetMGM back to MGM.
