Entain CEO Steps Down Under Shareholder Pressure

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Jette Nygaard-Andersen stepped down from her role as Entain CEO on Wednesday with immediate effect.

The move comes after the Financial Times reported “growing dissatisfaction” with leadership after interviewing more than 20 current and former Entain insiders.

Non-executive Director Stella David will take over as interim CEO of the BetMGM joint venture partner while a permanent replacement is found.

Entain’s stock responded positively to the news Wednesday, jumping 5.1% to 846.6 pence. The stock is down more than 46% from its 52-week high of 1,587.5 pence, hit Feb. 3.

Entain valuation down from offers

Based on the 598.5 million shares outstanding as of June 30, Entain’s valuation stands just north of £5 billion.

That means the company is now worth less than the valuations of its two recent takeover bids. MGM offered $11 billion, or a 22% premium at 1,383 pence per share, in January 2021.

A DraftKings offer nine months later in September 202, was for $20.5 billion, or a 46% premium at 2,800 pence per share.

Could MGM still slide in?

MGM, Entain’s partner in the BetMGM joint venture, could be interested in Entain once again given its current situation.

One top-15 investor told the Financial Times that “BetMGM is a tremendous asset and Entain remains a potential takeover target for MGM.”

MGM CEO Bill Hornbuckle said the company “moved on” from its bid for Entain in February 2023.

Entain chairman in trouble, too?

If MGM does revive its interest in Entain, Chairman Barry Gibson could also be on the hot seat.

Hornbuckle reportedly sees Gibson as an obstacle to closing a deal, people familiar with the relationship told the Financial Times.

What they said about management

Entain’s board was accused of being “some part naive, some part asleep” by a person close to an activist investor, FT reported, after Entain raised £600 million this June to fund acquisitions.

Activist investor Eminence called the move “value-destructive” as Entain’s stock dropped 10%.

Nygaard-Anderson called a meeting with more than 50 senior employees following a lacking third quarter report. Multiple participants said there was little reassurance.

Complaints about CEO went beyond boardroom

Part of the FT article deviated from the business issues and hit on Nygaard-Andersen’s use of private planes.

“Entain has broken from its previous cost discipline. Nygaard-Andersen, who earned £1.9mn last year, lives in Copenhagen at the weekend and travels for work during the week. During the pandemic she and Gibson began using private jets to travel to board meetings in Gibraltar.”

She continued to use private plans after the pandemic as well, including for trips to the US. Some of Entain’s finance and audit teams reportedly call her “Private Jette.”