Entain Officially Adds Critic Ricky Sandler to Board of Directors
Shares in Coral owner Entain Plc (OTC: GMVHF ) ended higher in UK trading on Wednesday after the company formally appointed Eminence Capital founder and critic Ricky Sandler as a non-executive director to its board.
Speculation about Sandler's potential appointment to Entain's board began in mid-December, when the operator announced the "immediate resignation" of CEO Jette Nygaard-Andersen, an executive He has publicly criticized Sandler.
Sandler's appointment to the board follows hedge funds Dendur Capital and Sached Heam Capital taking stakes in Entain, prompting the company to appoint the Eminence Capital boss to the board and involve him in the process of filling other vacant board positions. Just three days after Keith Meister's Corvex Management announced it would acquire a 4.4% stake in the gaming company, news emerged that Entain may give in to the demands.
"I look forward to working with the board members to help Entain achieve long-term success and create lasting value for its shareholders," Sandler said in a statement.
Sandler's hedge fund is estimated to hold up to 5% of Entain's outstanding shares, making the company one of the sports betting operator's largest investors.
Analysts bullish on Sandler board appointment
Analysts view Entain's addition of Sandler to the board as a positive for a company that some see as directionless and others as ripe for transformative deals.
Interactive Investor analyst Victoria Scholar said in a note to clients that Sandler joining Entain could lay the groundwork for the company to divest all or part of its 50% stake in BetMGM, which he said pushed before. Speculation surrounding the issue has grown after Corvex took a stake in Entain, as the hedge fund is also an investor in MGM and Meister sits on the casino operator's board of directors.
Scholar added that Entain "needs a new voice on the board to turn things around." Analysts at AJ Bell believe Sandler's addition to the board represents a fresh start for Ladbrokes' owners.
“Following the departure of chief executive Jette Nygaard-Andersen in December, the company needs to find direction. At least that’s the conclusion of last year’s HMRC investigation into a legacy business in Turkey. The company has a fresh start and can try to push profits onto an upward trajectory," the research firm said.
Entain owns valuable assets
There's no denying that Entain has valuable assets - namely its international gaming arm and a 50% stake in BetMGM. These holdings may be why the operator received strong takeover offers from MGM and DraftKings (NASDAQ: DKNG) in 2021, only to have them ultimately rejected, which could be a sign that Nygaard- The beginning of the end for Andersen.
Whether Sandler will push for an outright sale of the company remains to be seen, but with him on the board and other activist investors holding shares, a transformative deal could be just a matter of time.
Specifically, MGM said last year it would not reconsider a general takeover bid for Entain, but also made clear it wanted full control of BetMGM.
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Source: www.casino.org
