888 terminates CEO talks with Kenny Alexander as UKGC expresses concern
FS Gaming had built up a 6.6% shareholding in William Hill owner 888. It wanted to use its influence to install Alexander as CEO, alongside Lee Feldman as chair and Stephen Morana as CFO.
Investors were clearly excited by that prospect and were left disappointed by the collapse of the talks. The 888 share price stooped by more than 20% on the announcement.
Turkish business probe
Entain (formerly GVC) is expecting to be hit with a substantial financial penalty following a probe by HMRC and the public prosecutor into its former Turkish business unit.
In May, the operator revealed that historical misconduct involving former third-party suppliers and ex-employees of the group may have occurred.
Offences covered in the investigation include a potential breach of the Bribery Act.This case clearly remains an area of concern for the UKGC, which has commenced a new licence review of 888 in light of FS Group’s investment in the company.
If FS Gaming obtained a stake of more than 10% in 888, it would have triggered a change in corporate control. The UKGC must approve any change in corporate control.
If the corporate control application is rejected for any reason, the regulator’s only course of action is to revoke the licence of the operator entirely.
“The board concluded that the appointments proposed by FS Gaming have no reasonable prospect of being approved by the UKGC at this time and any actions by FS Gaming to effect a change of corporate control would likely put the group’s licences to operate in the UK at immediate and significant risk. Therefore, the board has unanimously concluded to terminate discussions,” said the company in a statement.
888 executive chair Lord Mendelsohn added: “We will be fully cooperating with the review, arising from potential issues with respect to FS Gaming’s investment and proposal, and look forward to bringing the review to a conclusion expeditiously.
“As a board we devoted significant time to considering FS Gaming’s proposal. However, following in-depth regulatory due diligence including engaging closely with the UKGC, the board had no option but to terminate discussions as it simply could not put licences in our largest market at significant risk.
“While this engagement temporarily interrupted the very thorough search process to appoint a new CEO, the board is finalising its appointment and expects to make an announcement in the very near future,” he added.