$11 Billion Deal: Entain CEO Snubs MGM Takeover Offer, Leaves Job Days Later
Another week, another potential gambling merger. It seems the overwhelming trend of huge gambling deals in 2020 is set to continue this year, as the potential purchase of UK-based Ladbrokes owner Entain by US-based giant MGM gathers steam.
Entain, which only recently rebranded from GVC Holdings, publicly rejected an $11 billion (£8 billion) offer from MGM last week.
However, less than seven days after that decision, Entain parted ways with its CEO, Shay Segev. Mr. Segev had only been in the role for seven months.
Strategic Rationale
Coincidence? It’s unlikely, but it could be just that. Both Mr. Segev himself and the Entain board of directors deny that his departure was affected by the MGM takeover bid, according to international news agency Reuters.
“This changes nothing with respect to the Board’s view of the recent proposal from MGM Resorts International to acquire Entain,” said Barry Gibson, chair of the board at Entain.
“We have asked MGM for more information on the strategic rationale for a combination,” he finished.
According to analysts spoken to by London newspaper City AM, the $11 billion deal still “significantly undervalues” Entain. The UK-based operator owns an extensive online casino and betting portfolio, including Ladbrokes, Coral, Bwin, and PartyPoker.
Revolving Doors
Mr. Segev was Entain’s second CEO in just under a year after previous CEO Kenny Alexander abruptly resigned the day before the UK’s taxman (HMRC) announced it was investigating his company in July 2020.
Mr. Segev will be moving on to become the joint CEO of international sports streaming service DAZN.
“We are sorry that Shay has decided to leave us but recognize that we cannot match the rewards that he has been promised”
Barry Gibson – Entain
Mr. Segev had become somewhat of a revolutionary CEO at Entain over his short time in the role of CEO, although he actually joined the company as Chief Operating Officer in 2016.
It was his vision that reportedly drove the effort to rebrand from GVC Holdings after he became CEO last year. He also sought to distance the company from some of its more controversial investments in gray-area markets, promising that all such activities would be closed down by 2023.
For the moment, Mr. Segev will continue as operating CEO until a replacement is found. The board has suggested this may take up to six months as it deals with the MGM offer and COVID-19 related disruption.
No Let-Up
MGM has until February 1 to finalize its offer to the Entain board. Being based in Europe, where online gambling has been basically legal for many years, Entain is an attractive proposition to MGM, which is looking to expand and improve its operations in the legal US market.
Entain itself has been no stranger to recent expansion, either, having only just offered £2.8 billion ($3.8 billion) to purchase fast-growing Eastern European company Enlabs – the owner of OptiBet and Ninja Casino.
Although that deal will be dwarfed by MGM’s offer for Entain itself, it’s still nowhere near the biggest gambling deals of the past twelve months.
Caesars and William Hill are all set to complete a massive, multi-billion merger in the coming months; game developer Evolution bought up its competitor NetEnt for several billion, and the Stars Group and Flutter Entertainment became the world’s biggest gambling operation when they merged last May.
For the latest on this story and all the mergers and acquisitions news in the gambling world, keep checking online.casino/news.
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