Entain potentially looking to sell more brands

Entain potentially looking to sell more brands

Entain potentially looking to sell more brands
Following reports from Sky News, a UK publication, that Entain may be looking to sell its PartyPoker flagship online poker platform, news has surfaced that the FTSE 100 group could be looking to unload more of its brands, among which could be several important ones. A review looking into the past several years of business decisions and acquisitions has been formed, people familiar with the matter have told the Financial Times. The pace of acquisitions under the company’s previous boss, Jette Nygaard-Andersen, drew the ire of activist investors and shareholders, who questioned the logic behind purchasing certain assets, and supposedly allowing existing ones, among which BetMGM, to lose momentum. A recent survey of the US iGaming market has shown that BetMGM’s market share has indeed been declining against competitors such as FanDuel and DraftKings. Regardless, the Financial Times is now writing that Entain’s change of leadership may come with a greater willingness to pare down the company and flog off some of its brands, citing its own sources. According to the publication, Entain will seek to remove those brands that have not been really integrated into its technology platform, which means that they would be rather easier to sell. Among the list of potential brands to sell are BetCity, a betting and gaming operator in the Netherlands, that the company bought for £398mn in 2023, and the deal was celebrated as a success as the group re-entered the regulated Dutch gaming market after withdrawing several years prior. The deal quickly soured, as Entain said that it would seek damages from the business’ former owners due to regulatory proceedings that the BetCity operator was facing at the time of negotiations. Yet, the fat-trimming will continue beyond BetCity, with Ladbrokes in Australia also likely to go, writes the publication, and not surprisingly given the increasingly difficult regulatory regime, and possibly the small return the brand is generating locally. More potential sale targets include Enlabs in Sweden, and CrystalBet in Georgia. Why the urgency? Entain is potentially trying to recover from what many of its investors and shareholders have said has been unreasonable spending on mergers and acquisitions without a clear plan to strengthen and maintain existing operations. STS, a Polish bookmaker, was not named as one of the potential targets for sale, but the company’s decision to acquire it did elicit private and public misgivings by shareholders. Another brand that could be sold in future is SuperSport, which was acquired in 2022 for £599m. Yet, activist investors may have been placated by buoyant financial performance in Entain CEE, which is mostly owing to STS and SuperSport. On this account, Entain did the right thing. Yet, the company will be trying to refocus its efforts on the United Kingdom and Germany. Ultimately, this is not to say that Entain will pull the trigger and execute any of these sales. The brands and companies that are not part of Entain’s tech stack account for about one-third of its net gaming revenue, at least in H1 of 2023 according to financial results. Image credit: Entain Group

14 MAR 2024

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