Private Jette

The Financial Times this week published a scathing piece looking at the recent inner workings of one of the world’s biggest gambling companies, Entain.

CEO Jette Nygaard-Andersen is facing “growing dissatisfaction” with her leadership among company stakeholders, the piece suggested, and the FT has interviewed more than 20 current and former Entain execs, advisers and investors to back up its claims.

Among the many criticisms levelled at the CEO was an overuse of private air travel, which allegedly led some staff within the finance and audit teams to nickname her “Private Jette”.

But beyond that, investors and executives alike have offered up multiple attacks on Entain’s leadership in recent years, suggesting that the company’s strategy of snapping up as many bolt-on acquisitions as possible (11 deals worth more than £2bn in just the last three years) has taken Entain down the wrong path.

According to the article, one top 20 institutional investor said Nygaard-Andersen’s “headlong rush into nonstop M&A,” while Entain’s core business continued to struggle, “showed a lack of awareness and general understanding of the economics of the business and shareholder sentiment.”

Entain, meanwhile, said it expects the value of its bolt-on acquisitions to double to more than £4bn over the next five years.

Elsewhere, criticism was even starker, with one high-ranking executive telling the FT: “It’s organisational chaos. Every three months, we’ve had not small re-orgs but big re-orgs … we don’t have anybody who knows how to operate – forget about gambling – just how to run an operation.”

After Entain’s Q3 results did little to quell the widespread concerns, Nygaard-Andersen apparently called a meeting with some 50 senior managers in an attempt to put their minds at ease.

“But several participants said her performance did little to reassure them,” according to the article.

All eyes are now on an upcoming board refresh, the FT suggests, with disagreements rising between Entain management and major investors over three remaining vacancies.

Several investors have backed the potential appointment of Ricky Sadler, founder of activist investor group Eminence Capital, which would lead to “enhanced scrutiny and an awareness that management and the rest of the board are under the microscope.”

Shareholders will undoubtedly now be hoping for a swift resolution to internal conflicts, and for Entain to put itself unequivocally on the road to recovery after a rocky few years.

Year of the Living Dead

The New York Times this week tracked the disastrous progress of several young tech companies in 2023, “From Unicorns to Zombies.”

It used the example of co-working concept WeWork to illustrate its point, as the business filed for bankruptcy last week after previously raising more than $11bn in funding as a private company.

Similarly, healthcare startup Olive AI raised $852m, freight startup Convoy raised $900m and home construction startup Veev raised $647m, but all have either filed for bankruptcy or shut their doors in the past six weeks.

“After staving off mass failure by cutting costs over the past two years, many once-promising tech companies are now on the verge of running out of time and money,” the article said.

The harsh reality for these companies is that “investors are no longer interested in promises,” it added, with VC firms now tightening their belts and deciding which of their assets to save and which to leave behind.

The article goes on to provide a laundry list of companies contributing to “an astonishing cash bonfire” this year, with huge valuations collapsing and forcing owners to sell off their once-promising businesses on the cheap.

Around 3,200 private venture-backed US companies have gone out of business this year, according to the piece, despite together having raised more than $27bn in funds.

2023 has been “the most difficult year for startups in at least a decade,” according to Carta head of insights Peter Walker.

Meanwhile, one particular business area is thriving. SimpleClosure is a startup that helps other startups wind down their operations, and “has barely been able to keep up with demand since it opened in September.”

The company helps others to prepare legal paperwork and settle their obligations to investors, vendors, customers and employees.

While the outlook may be bleak for a huge number of new companies out there, at least there is a silver lining for someone. 

In times like these, it seems you can always choose to be successful in “the business of failure.”

The art of bad news

The Wall Street Journal this week delivered a feature exploring “the Art of Delivering Bad News,” via the analysis of a letter sent to Spotify employees revealing that some 1,500 jobs in the company were at risk.

Company-wide memos announcing layoffs – subsequently to be published online – have become all too common this year, with Meta, Salesforce and Amazon also having similar missives made public in recent months.

To explore the phenomenon, Wall Street Journal reporter Chip Cutter provided his analysis of the latest job cuts warning from Spotify.

The article features segments of the letter, sent by Spotify CEO Daniel Ek to all employees, alongside Cutter’s own translations and analyses of the corporate speak contained within.

Cutter points out the use of innocuous sounding language such as “an update” to describe the changes coming within businesses – which will ultimately mean the loss of thousands of peoples’ livelihoods.

He also takes apart the letter’s addressing of the macroeconomic climate, the use of euphemistic buzzwords such as “rightsizing,” and the mealy-mouthed thanks to soon-to-be ex-employees, which are universally followed by reasons that the company will now be just fine without them.

Readers are encouraged to take a look at this detailed analysis in all its glory, to help cut through the noise of corporate speak so often rolled up into letters like these.

Entain is under scrutiny after influential hedge funds voiced their concern over operational performance and the leadership capabilities of CEO Jette Nygaard-Andersen.

As first reported by the Financial Times, New York-based funds Dendur Capital and Sachem Head Capital Management have joined Eminence Capital in going public with their doubts.

The hedge funds have quietly amassed stakes in Entain, whose share price has suffered a steep decline of over one-third this year, culminating in a three-year low.

The dissenting voices of activist investors come amid a series of strategic setbacks which are mainly attributed to the tightening regulatory environment in the UK.

Entain’s summer equity raise, intended to finance the acquisition of Polish gaming company STS, drew major criticism from Eminence Capital and has been pinpointed as a contributing factor to the negative share price performance.

In a departure from its historical trajectory of consistent online NGR growth, Entain has indicated a potential decline in its pro forma online gaming revenues for full-year 2023.

CEO Nygaard-Andersen, who took charge in January 2021, is now in the spotlight according to the FT. Her relative inexperience in the gambling industry and the company’s recent performance have drawn activist criticism and accusations of “self-inflicted wounds”.

In a bid to control shareholder unrest, Entain has committed to expanding its board with four new non-executive directors. However, activists, led by Eminence Capital CEO Ricky Sandler, are now advocating for direct involvement in those board appointments.

Entain tried to reassure stakeholders during a recent investor day event to outline its strategic growth plan, with a focus on organic expansion, margin improvement, and capturing an increased share of the US online sports betting market.

Chairman Barry Gibson, meanwhile, has called for investor patience amid an impending £585m settlement with UK tax authorities over historical bribery allegations.

To add to Entain’s challenges, London-based Perbak Capital Partners and Ilex Capital Partners have taken out short positions against the company.

The funds are effectively betting on the continued underperformance of the company and its stock.

Entain’s senior executives have taken the opposite approach by increasing their shareholdings. Earlier this month, Gibson quadrupled his stake as Nygaard-Andersen more than doubled her holding.

Entain board members have displayed their confidence in the company’s future by significantly increasing their shareholdings in the firm.

Share purchase details

Entain chairman Barry Gibson, for example, more than quadrupled his previous shareholding of 29,836 shares with the purchase of 93,664 additional shares at a price of 928.8p each.

That gave Gibson’s purchase a total price of around £867,000 and brought his new shareholding to 123,500 shares.

Gibson’s wife Brenda also acquired an additional 15,532 shares at 937.2p, for a total purchase price of £145,566, bringing her total shareholding to 57,434 shares.

CEO Jette Nygaard-Andersen, meanwhile, more than doubled her shareholding from 30,831 shares to 65,381 with the purchase of 35,000 new shares at 927.3p each. That transaction had a total value of around £324,559.

Senior independent non-executive director Stella David (pictured right) made the largest purchase of all as she snapped up 95,025 shares at a price of 945p each, giving the purchase a total value of £897,986.

That took her shareholding from just 17,161 to more than 112,000.

David has sat on Entain’s board of directors since February 2021 and also holds non-executive director positions with several other companies including Norwegian Cruise Line Holdings, Domino’s and Bacardi Ltd, as well as acting as chair of Vue International cinema group.

Finally, non-executive director Rahul Welde (pictured left) purchased 21,644 shares in the business at 924p each, for a total of £199,991. He previously held no shares in the business.

Together, Entain’s directors now hold a little over 0.1% of the company’s issued share capital, or 665,682 shares.

New strategy incoming

The share purchases follow a low point in Entain’s share price, which has fallen by over 28% in 2023 to date.

In fact, shares recently reached a three-year low of £9.18 per share after the firm was hit by various setbacks throughout 2023.

In response, the company announced a new strategy last week, including a renewed focus on high-growth markets, an exit of non-core markets and a fresh approach to capital allocation.

The company’s newly focused strategy will see it fix its attention on high-return markets such as the US, Brazil, central and eastern Europe and New Zealand.

In a note shared with investors today, investment bank Peel Hunt reiterated its Buy rating for Entain shares and target price of 1,300p.

Following last week’s strategy announcement, Peel Hunt suggested Entain should start to recover next summer by reducing its costs, including M&A-related expenses, and investing in high growth areas such as its BetMGM joint venture in the US.

In 12 months, it said, “we believe Entain will clearly be taking share of a growing industry.”

That optimism came despite a 14% downward adjustment of Peel Hunt’s forecasted profit before tax for Entain in the full-year 2023, which it now expects to come in at £386m.

Value investment fund Dodge and Cox has become the second largest shareholder in Entain with a 10.3% stake in the business. 

The doubling of the US mutual’s holding is a sign that markets may be starting to view Entain as undervalued after a six month period that has seen its stock decline by 36.7%.

The fund now owns the second largest stake in the Ladbrokes-owner after American financial services firm Capital Group, which holds a 14.8% share.

Other major shareholders include BlackRock, with a 5.5%, and Sands Capital Management, listed as owning a 5% total stake in the company.  

Entain shakes up capital allocation strategy 

In last week’s quarterly financial report, Entain announced a shake-up of its capital allocation strategy.

This involved the formation of a dedicated capital allocation committee on the board to scrutinise decisions related to capital. 

Entain said the new plan would see the company focus more intently on investments with higher returns.  

Chief executive Jette Nygaard-Andersen added that the business planned to reduce its pace of M&A going forward. 

This followed investor criticism the company was hurting shareholders by funding bolt-on acquisitions with undervalued shareholder capital.

Bumpy road 

The news is the latest twist in a turbulent year for Entain’s share price. 

In February, the operator saw its stock plummet 13% after its BetMGM joint venture partner MGM Resorts ruled out a second takeover bid.

Speaking on its FY2022 earnings call, MGM CEO Bill Hornbuckle said: “The simple answer on Entain is no, we’ve moved on.”

Entain had previously rejected a January 2021 takeover bid from the US gaming giant that valued the business at £8bn, suggesting the offer “significantly” undervalued the company. 

The shares faced another battering in March after the company forecast lower margins for 2023 compared to the prior year.  

While the stock recovered most its value by May, news that the group faced a significant HRMC penalty for historic misconduct contributed to another slump.

This was exacerbated a few weeks later when shareholder Eminence Capital criticised Entain’s acquisition of STS Holdings as an “empire building, shareholder value destroying strategy”.

In August, the business announced it had set aside £585m for HMRC probe, a higher-than-expected figure. The stock had slumped to £11.75 per share by the following week. 

After warning of “softer than expected” online revenue in late September, Entain stock finally hit a three-year low at £9.18 per share. 

Entain has announced a new strategy involving a renewed focus on high-growth markets, an exit of non-core markets and a new approach to capital allocation.

The comprehensive new programme follows several quarters of sluggish online growth, with Entain missing revenue guidance since Q2. 

The slimmed down new market portfolio will centre on high-growth, high-return markets such as the US, Brazil, CEE and New Zealand. 

In its core markets, including the UK, Australia, Italy, Germany and the Baltics, the operator said it will aim to create profitable growth. 

Entain stressed this approach would see the business exit smaller non-core operations.  

Another pillar of the new strategy includes a plan to push its US market share to 20-25% through investment in product and pricing capabilities following its acquisition of Angstrom.

The business said it will simplify its organisational structure to make £100m of cost saving by 2025. 

Entain shakes up capital allocation strategy

The operator added it intends to shake-up how it spends money going forward with the creation of a capital allocation committee for the very first time.

This will be a board committee run by non-executive directors to improve the company’s decision-making processes, helping to decide on share buybacks, M&A and other matters related to capital.

Chief executive Jette Nygaard-Andersen said the new priorities for capital will involve “laser focusing” on areas it can get the best ROI, maintaining strong balance sheets and supporting cash flow generation. 

“We’ve heard the markets challenge on our approach to capital allocation,” said Nygaard-Andersen.

In a June open letter, Entain shareholder Eminence Capital sharply criticised Entain for its acquisition of Polish operator STS Holdings.

Eminence blasted the “illogical” deal, arguing that issuing undervalued share capital to fund acquisitions was “an empire building, shareholder value destroying strategy.”

Nygaard-Andersen said subsequently the business would be looking at “a much slower pace of M&A going forward”, with a renewed focus on organics growth.

However, she added the company continues to support a progressive dividend. 

Business expects DPA settlement in Q4

Entain chairman Barry Gibson also gave an update on the deferred prosecution agreement that the business is negotiating with the UK tax authorities over a historic bribery probe.

This relates to Entain’s former Turkish business, which has since been sold. The company admitted in May that misconduct involving third-party suppliers and former employees may have taken place. 

Gibson said the business is set to appear before the court in Q4 2023, when it expects the agreement to get approved. The company has set aside £585m to pay the potential settlement. 

“The deferred prosecution agreement kind of draws a line under it as far as Entain is concerned,” said Gibson. 

“However, we will still be cooperating with the CPS as they’re looking into activities of certain individual suppliers and as we said before, former managers of the company, so there will still be headlines in the press as these things develop and go ahead.”

Entain will accelerate plans for a market review and operational streamlining in response to “softer than anticipated” Q3 2023 results.

In a trading update, the operator reported a mixed performance in online NGR following the summer season.

Entain now anticipates high single-digit percentage growth in online NGR for Q3 2023, with a proforma decline also in the high single digits. 

Several factors contributed to this performance, including adverse sporting results affecting sports margins in September, ongoing implementation of safer gambling measures across the group, regulatory challenges, as well as slower-than-expected growth in Australia and Italy.

Entain’s shares tumbled by over 8% during the early hours of trading.

Despite the challenges, Entain highlighted strong performance from recent acquisitions, notably SuperSport in Croatia. 

The retail segment also demonstrated robust performance. In the US, BetMGM continues to perform well and is on track to deliver positive EBITDA in the second half of 2023.

2023 guidance

Entain now expects group online NGR for FY2023 to rise by a low double-digit percentage, with proforma NGR decreasing by a low single-digit percentage. 

The company reaffirmed its FY2023 EBITDA guidance range of £1bn to £1.05bn, supported by strong operational controls.

Entain CEO Jette Nygaard-Andersen commented: “We continue to see good underlying growth in our online business and are reiterating our EBITDA guidance for the year despite softer than expected revenue growth in Q3 and the ongoing roll-out of industry-leading safer gambling measures.  

“We continue to attract more customers than ever before to enjoy our products and services. BetMGM remains on track to deliver positive EBITDA in H2 and a full year NGR performance at the top end of our expectations, and we are particularly excited about the product improvements that we are rolling out over the NFL season,” she added.

Planned actions

Over the past three years, Entain has undergone significant strategic transformation, focusing on improving earnings quality and aligning its operations for long-term shareholder value. 

In July, iGaming NEXT reported that Entain was in the process of streamlining its commercial operations.

This involved a shift from a brand-focused approach to embracing a regional strategy, which may result in the elimination of certain senior positions and an increased probability of job cuts within the organisation.

Entain said it now plans to further accelerate performance and delivery by implementing several strategic actions, including a comprehensive market review with a focus on sustainable organic growth in the long term.

Moreover, the company aims to further simplify its group structures and operations to enhance operational leverage and reduce costs, while a plan is in place to migrate acquired businesses onto Entain’s industry-leading technology platform.

Entain also plans to optimise its capital allocation priorities to maximise returns for shareholders.

On a positive note, the operator is making progress toward achieving its online EBITDA margin target of 30%.

Nygaard-Andersen expressed confidence in Entain’s growth prospects despite the challenges faced in Q3.

“Our focus now is on accelerating the actions we are taking to drive sustainable organic growth, expand our margins, capitalise on the US opportunity and deliver long-term returns for our shareholders,” she stated. 

The company will provide further details on these strategic actions alongside its Q3 trading update on 2 November.

Analyst comment

Edison Group director Neil Shah weighed in on the situation, stating that “Entain will be hoping it has an ace up its sleeve” in light of the unexpected dip in online gaming revenue. 

However, he also pointed out that the company seems to be demonstrating ongoing resilience and adaptive strategies as it navigates the financial landscape of online gaming.

In H1 2023, the operator reported an 11% constant currency rise in overall NGR to £2.4bn.

Online revenue during this period saw a substantial 12% surge to £1.7bn.

This growth was propelled by a 19% rise in online gaming revenue to £918.3m and a modest 3% uptick in online sports betting revenue to £742.2m. 

In parallel, retail revenue also experienced an 11% year-on-year increase to £709.3m.

In recent months, several companies have initiated strategic reviews, including Catena Media and Esports Entertainment Group.

Elsewhere, London-based investment brokerage Peel Hunt today reiterated its Buy rating for Entain stock but downgraded its target price from 1,700p to 1,300p.

“Entain remains a leading player in the US through its stake in BetMGM and it has the upside from multiple acquisitions that it has yet to extract fully,” wrote Peel Hunt analyst Ivor Jones.

“It promises a renewed focus on cost cutting/efficiency and optimised capital allocation with the 2 November trading update, and today’s statement was not even a profits warning.

“However, we acknowledge that confidence in a hitherto steady performer has been knocked, and we have reduced our target price to reflect this,” he added.

Entain has unveiled its H1 2023 financial results alongside the explosive news it has set aside more than half a billion pounds for a potential regulatory settlement.

Topline numbers

The operator reported an 11% constant currency rise in overall NGR to £2.4bn for H1 2023.

Online revenue for the period rose by 12% to £1.7bn driven by a 19% uptick in online gaming revenue to £918.3m and a 3% increase in online sports betting revenue to £742.2m.

Retail revenue, meanwhile, climbed by 11% year-on-year to £709.3m.

These figures exclude the group’s US joint venture BetMGM, which reported separate results in July. The brand generated H1 NGR of $944m, up 55%.

Entain’s underlying EBITDA climbed 6% to £499.4m as underlying operating profit came in at £307.4m, up 25% compared to last year. Online EBITDA increased by 8% to £416m.

When broken down by geography, Italy reported the strongest online revenue growth at 12% year-on-year.

Georgia (7%) and the Baltics Nordics (7%) also reported growth, while declines were felt in other key markets such as the UK (-2%), Australia (-2%), Brazil (-14%) and Germany (-30%).

The decline in Germany was attributed to sports betting deposit limits from H2 2022 and gaming deposit limits from H1 2023, while Entain said a lack of regulatory enforcement has seen players switch to unlicensed operators in the market.

Finally, the operator reported a record level of online active customers in H1 following a 23% rise, or 15% excluding acquired businesses.

Entain said this was a continuing result of broadening its product offering for a more recreational customer base.

News nugget

Major news was announced alongside the H1 2023 financial results.

Entain is now braced for a £585m settlement in respect of its ongoing deferred prosecution agreement negotiations with the Crown Prosecution Service.

The operator is being investigated by HMRC over its legacy Turkey-facing business and has set aside the provision while seeking to resolve the matter.

The settlement relates to alleged offences under Section 7 of the 2010 Bribery Act.

“The Entain of today bears no resemblance to the GVC of yesterday, which had a different management team, different strategy and to be blunt, different standards,” said Entain chairman Barry Gibson.

“Every aspect of our business model strategy and culture has been reviewed, analysed and changed.

“We’ve also completely overhauled the board and the leadership team. And I’m not very confident in saying that the culture of the two businesses is worlds apart,” he added.

Current trading and outlook

Entain is now guiding to full-year 2023 EBITDA of between £1bn and £1.05bn.

Entain has acquired sports pricing and analytics firm Angstrom Sports for a total consideration of £81m, along with contingent payments that could reach up to £122m over a three-year period.

The acquisition is expected to be completed during Q3 2023.

Although rumours regarding the deal started circulating in May, both companies refrained from providing confirmation until now.

London-based Angstrom is known for its advanced predictive modelling and data analytics, which offer pricing and forecasting capabilities across a wide range of US sports betting markets.

Acquisition rationale

Entain said the acquisition positions it “as the only global operator with a full in-house suite of end-to-end analytics, risk and pricing capabilities for US Sports betting products”.

The operator, which is a joint venture partner in US online brand BetMGM, believes that this will lead to a greater number of betting opportunities, optimised parlay and in-play products, as well as enhanced pricing expertise and risk management.

Entain CEO Jette Nygaard-Andersen expressed her enthusiasm for the acquisition: “We are delighted that Angstrom will be joining Entain, enabling us to accelerate the development of the Entain Platform.  

“Their next generation forecasting, pricing and risk management capabilities will unlock significant opportunities across BetMGM’s US sports betting offering, particularly in the fast-growing markets of parlay and in-play wagering.

“This acquisition will provide our customers with an unrivalled sports betting experience underpinned by enhanced in-house data-analytics, a global platform and market-leading brand,” she added.

Angstrom Sports CEO Sion Colley said: “We are excited to join forces with Entain and contribute to the delivery of unique and engaging betting opportunities in the US sports market.

“Our shared commitment to innovation will enable us to bring high-quality products and experiences to sports betting customers through Entain’s globally recognised brands.”

All eyes on M&A

Entain’s M&A strategy has recently garnered significant attention.

Last month, major stakeholder Eminence Capital initiated a revolt against Entain due to its £750m acquisition of Polish bookmaker STS.

Eminence Capital specifically criticised Entain’s decision to finance the deal by issuing new shares.

The firm argued that this capital allocation strategy was perplexing and detrimental to value, pointing out a disparity in Entain’s valuation approach.

Entain is seeking to boost its CEE business with the £750m purchase of Poland’s leading sports betting operator STS Holding.

The business, which is listed on the Warsaw Stock Exchange, recorded 2022 revenue of £121m and adjusted EBITDA of £50m, ending last year with more than 783,000 active users.

Entain’s offer for 100% of the business will be priced at PLN 24.80 per share, valuing the equity value of STS at approximately £750m, and the enterprise value at approximately £690m.

The offer represents a 35% premium to the six-month average share price as of 12 June 2023. Around £450m will be offered in cash, while the remainder will come from a 10% stake in Entain CEE.

STS CEO Mateusz Juroszek and his father Zbigniew Juroszek, who through their family foundations hold approximately 70% of company shares, have entered into a binding agreement to irrevocably accept the offer.

The acceptance threshold has been set at 50% of shareholders, with a tender offer to be published in mid-July.

Mateusz will remain as CEO of STS and join the board of Entain CEE. He has been CEO since 2012.

Once the deal completes, both Juroszek foundations will re-invest a proportion of their proceeds into Entain CEE in return for a 10% stake.

Entain CEE is Entain’s venture in Central and Eastern Europe (CEE) together with its partner EMMA
Capital (EMMA). Last year, the venture acquired Croatian market leader SuperSport.

Radim Haluza, CEO of Entain CEE, will continue to drive and oversee the continued success of both STS and SuperSport

Entain and EMMA will fund the offer in proportion to their current shareholding in Entain CEE, which stands at 75% and 25% respectively.

Entain will fund its proportion of the consideration via a separately announced equity placing and a separate retail offer through the PrimaryBid platform. There are more details on that below.

Equity placing and retail offer

The purchase will be funded via a £600m equity raise to be undertaken by Entain, through a non-pre-emptive placing of new ordinary shares in the business, made available to new and existing institutional investors in the company.

Concurrently with that placing, Entain will also make a separate offer of new ordinary shares to retail investors via capital markets technology platform PrimaryBid.

The retail share offer is available to existing shareholders only.

Entain commented that it “values its retail investor base and is therefore pleased to provide retail investors with the opportunity to participate in the PrimaryBid offer.”

After paying the roughly £450m net cash consideration related to its acquisition of STS, Entain said the remainder of its £600m equity raise would be used to fund further near-term acquisitions.

Strategic rationale

Entain said the deal provides an “exciting opportunity to acquire an attractive asset in a high-growth regulated market” within the CEE region.

Poland boasts the largest economy the CEE.

The country’s gambling market reported $1.6bn of GGR in 2022 as average gambling spend per adult increased at a CAGR of 24% over the last three years.

Through the transaction, Entain expects to generate £10m+ of run-rate synergies, including through the combination of two operational and tech platforms in the CEE region.

The London-listed operator said the purchase would be earnings accretive in its first full year of ownership.

Entain added there would be incremental potential upside if the Polish market fully liberalises online casino in the same way as online sports betting, with STS well positioned to capitalise.

What they said

Entain CEO Jette Nygaard-Anderson said: “STS is an exceptional business with a great brand, a compelling omni-channel offering, and an outstanding CEO and management team.

“The transaction is perfectly aligned with our Entain CEE strategy and our wider M&A strategy of acquiring high-quality businesses with leading positions in attractive, growing and regulated markets.”

STS CEO Juroszek added: “I am very excited to be joining the board of Entain CEE, and see significant growth opportunities in the Polish market for STS under Entain’s ownership.

“Entain is a world class operator and has already made a significant investment in this region through SuperSport in Croatia.

“We could not have found a better partner to help us take STS into the next phase of its growth, and it is clear that Entain shares our ambition and vision for its future.”

Analyst reaction

London-based research firm Regulus Partners described the acquisition as a “high quality, low risk deal at a win-win price”.

“STS’s proven competence, the market’s fiscal-regulatory limitations, and a high rate of adoption probably make future performance pedestrian but value accretive without regulatory change,” added Regulus Partners analyst Paul Leyland.

“While not cheap, a fair price is being paid for a very strong market position which is hard to leverage outside Poland, but which a global operator can leverage through a combination of scale, portfolio risk management and regulatory optionality.”

Elsewhere, Peel Hunt analyst Ivor Jones said he expects Entain to eventually buy out the minority shareholders in the Entain CEE business.

“This acquisition is more than just another bolt-on: it adds to a string of smart, diversifying, deals
and bolsters our confidence that Entain can recycle its cash flow efficiently,” he wrote.

Entain chief governance officer Robert Hoskin will step down after serving the company for 18 years.

He will officially leave the board on 30 June, but will continue to fulfil his role within the group until 31 August.

Hoskin joined the company in 2005, initially serving as the company secretary and group director of legal, regulatory and secretariat.

In October 2020, he was promoted to his current position and joined the board in 2021.

Throughout his tenure, the business has evolved from holding just two gambling licences to 135 licences in more than 30 different countries.

Restructuring plans

Given Hoskin’s departure, Entain has decided to restructure certain responsibilities, particularly in the area of regulatory affairs, to align with the company’s exclusive focus on regulated or regulating markets.

Simon Zinger, currently Entain general counsel, will assume Hoskin’s responsibilities.

“Robert was exceptionally supportive, welcoming and helpful to me when I joined the board of Entain as a non-executive director in 2019,” said Entain CEO Jette Nygaard-Andersen.

“I was therefore delighted that he agreed to remain in his role after my appointment as CEO, and I have benefitted hugely from his wisdom and counsel.

“He has played an instrumental role in making Entain the success story that it is today, and I would like to express my sincere thanks to him for everything that he has done for me personally and the Group more widely,” she added.

Reflecting on his departure, Hoskin stated: “Entain has undergone an extraordinary transformation in recent times and now stands as a responsible operator with outstanding governance and a clear commitment to sustainability in all its forms.

“I am truly honoured to have been part of this extraordinary journey and wish everyone at Entain the best for the future.”

Before joining Entain, Hoskin served as the head of the Investment Company Secretariat at Aberdeen Asset Management.