Entain Activists Push for Sandler to Join Board, May Lead to CEO’s Removal

Date of Post: November 22, 2023, 12:57h.

Last updated on: November 22, 2023, 12:57h.

The US-listed shares of Entain Plc (OTC: GMVHY) rallied ahead following reports about significant moves from activist investors in the company.

Entain CEO Jette Nygaard-Andersen in a presentation
Entain CEO Jette Nygaard-Andersen. Activist investors are building stakes in the gaming company and could push her out the door. (Image: Alamy)

Dendur Capital and Sached Heam Capital, New York-based hedge funds, have bought stakes in Entain and are said to be urging the company to grant Eminence Capital founder Ricky Sandler a seat on the board due to his criticism of Entain management.

Five unidentified sources with knowledge of the matter told the Financial Times that Dendur Capital and Sached Heam Capital want Sandler installed as an Entain director and that they want him to be directly involved in filling several other vacancies on the board.

Activist Investors Target Entain’s Leadership

There are concerns that CEO Jette Nygaard-Andersen could be pushed out of the company amid the recent surge in activist activity among investors.

She took the top post in January 2021 and criticism of her leadership has intensified following the STS acquisition and a disappointing 2023 net gaming revenue forecast.

Investors are worried that Entain might face increasing regulatory challenges in the UK, while the company’s depressed market capitalization could lure takeover bids.

Despite investor concerns, the company maintains that it has outlined a clear plan for organic expansion, and Nygaard-Andersen received 99% support among shareholders at the company’s annual meeting in April.

The Future of BetMGM in the Mix

While BetMGM, in which Entain holds 50%, has not been directly mentioned, it is possible that it could be impacted by the activist movements at some point.

Activist investors often push companies to consider divestitures, and Entain might be encouraged to sell its stake in BetMGM, potentially reducing its capital commitments in the expensive US market.

Selling BetMGM would also potentially deter would-be buyers, as it is widely seen as a primary driver of Entain’s acquisition offers made by MGM and DraftKings in 2021.

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