Ladbroke’s gambling group Entain makes first move to sell PartyPoker
The FTSE-100 gambling group that owns Ladbrokes, Entain, has begun to prepare a sale of PartyPoker, in an effort to stall activist investors.
Entain has hired bankers to prepare a sale of PartyPoker as part of its attempts to revive its core operations, reports Sky News on March 12. Advisers from Oakvale Capital are reportedly working on the prospective sale of the online poker business, according to company insiders. The deal is expected to go for roughly £150 million ($192 million).
That’s quite the drop from the £5 billion valuation that PartyPoker’s then-parent company PartyGaming got when it first floated in London in 2005. However, the last 19 years have seen the online poker service lose a huge swathe of its customers.
PartyPoker is considered non-core to Entain’s business, as it also owns British-based Ladbrokes, Coral, and a stake in major US betting company BetMGM, which recently made a push into the UK market. The planned sale comes after Entain has endured pressure and criticism from activist investors that have built up strong positions on its share register.
The company parted ways with former CEO Jette Nygaard-Andersen last year and is now headed up by interim chief executive Stella David. Shares in Entain were trading at around 758p on Friday morning, down from 739p on Tuesday morning.
What are activist investors?
Activist investors refer to those engaging in a form of activism where shareholders use equity stakes in a corporation to put pressure on its management. In the case of Entain, these investors are using the methods to express their concern about Entain’s poor performance in its core markets, particularly as regulators have recently tightened regulation on the online gambling industry.
These investors have also voiced grievances with management’s costly deals, which could account for why the sale of PartyPoker is now on the table. No official reason has yet been stated as to why Entain is considering and reportedly preparing for the sale of the online poker company.
Featured image: Entain
The post Ladbroke’s gambling group Entain makes first move to sell PartyPoker appeared first on ReadWrite.