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June 17, 2024
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Entain appoints head of US activist investor to board

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UK gambling group Entain has appointed the head of one of its largest activist investors to its board, weeks after the company’s former chief executive quit following a backlash over a slumping share price.

London-listed Entain said on Wednesday that Ricky Sandler would join the board as a non-executive director. Sandler runs US activist hedge fund Eminence Capital, which first took a stake in Entain in late 2020 and now owns a stake of between 4 and 5 per cent.

Sandler, who has previously publicly scolded Entain’s board for a share price performance that has lagged behind its rivals, will work with the board to pick another non-executive director.

“Ricky has a deep knowledge of our business and a firm belief in the quality of our operations and substantial growth opportunities,” said Entain’s chair Barry Gibson.

The move to install Sandler on the board comes less than a month after Jette Nygaard-Andersen quit after a three-year tenure as Entain chief executive that saw the FTSE 100 group lose more than 35 per cent of its market value. Investors also attacked a series of acquisitions made under her watch.

In a letter published in June last year, Sandler said that “while we can support the company pursuing seemingly rational acquisitions, funding them with highly undervalued equity is an empire building, shareholder value destroying strategy”.

Entain’s management also drew criticism from investors for walking away from two takeover approaches from US gambling operators MGM Resorts International and DraftKings, that valued it at a premium.

Eminence was one of several New York-based activist funds, alongside Sachem Head Capital Management and Dendur Capital, which had pushed Entain to grant them board seats.

In a statement on Wednesday, Sandler said he intended to work “with my fellow directors to help Entain achieve long-term success and create lasting value for its shareholders”.

Corvex, another US activist hedge fund with roughly a 4.4 per cent stake in the bookmaker, last month called on the company to turn around an “unacceptable” performance.

Entain shares climbed 1.1 per cent in early afternoon trading on Wednesday.

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