Entain May Sell BetMGM Stake or Consider MGM Merger, Analyst

Earlier this month, the global gaming giant, Entain, announced the departure of its CEO, Jette Nygaard-Andersen. The unexpected move resulted in the appointment of the company’s non-executive director, Stella David, as interim CEO, until the hire of a permanent replacement for the senior-level role.

Now, a new report released by Seeking Alpha, citing an expert analyst, suggests different options are ahead for Entain, including a full or partial sale or sale of assets. James Wheatcroft, a Jefferies analyst, explained that the ongoing management changes may positively impact the gaming and entertainment giant’s stock. Ahead of the start of 2024, Jefferies changed its rating for Entain from “hold” to “buy.” As of Monday this week, the company’s shares rose by 5.0%, reaffirming an ongoing positive change over the last two weeks.

With that in mind, Wheatcroft predicted several different scenarios for the future of Entain. He did not rule out a potential sale of Entain to MGM Resorts International. Moreover, Wheatcroft said that Entain may consider selling its 50% stake in BetMGM. The expert analyst confirmed that Entain may also explore divesting other company assets. According to Wheatcroft, the possible changes may come in addition to the company’s search for a new CEO. “Several factors now imply an opportune moment for MGM to re-evaluate an approach to Entain,” wrote the analyst.

“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.“

James Wheatcroft, analyst at Jefferies

Senior-Level Changes Follow a CPS Agreement

The latest announcement comes after a recent Sunday Times report suggested that Entain may appoint the founder of Eminence Capital, Ricky Sandler, to its board of directors. Sandler previously criticized the resignation of Entain’s CEO. Moreover, he is an outspoken critic of some of the company’s decisions such as the purchase of STS Holding, Poland’s leading sports betting operator.

The recent change to Entain’s senior leadership came after late last month, the company confirmed it reached an agreement with the Crown Prosecution Service (CPS). The aforementioned settlement was related to an HMRC investigation into the activities of the company in Turkey dating back several years. The recent £585 million ($737.5 million) settlement agreement comes despite Entain’s sale of its Turkish assets after a deal from 2017.