Entain’s (ENT.L) CEO Jette Nygaard-Andersen has finally left the table after a three-year stint that saw the company lose 35% of its market value. Under her watch the $5 billion UK-listed sports betting group rejected an offer from MGM Resorts International (MGM.N), and embarked on its debt-funded M&A spree, drawing the ire of activist investors like Eminence Capital’s Ricky Sandler.
Despite Nygaard-Andersen’s patchy record, her departure could now leave the group vulnerable to a takeover. Including debt, it is worth just 8 times forward EBITDA, compared to rival Flutter Entertainment’s (FLTRF.L) 14 times, using LSEG data. Back in January 2021, Entain turned down MGM’s offer of some 8 billion pounds for the group, 60% above its current price.
To stay independent, the next CEO will need to tackle a hefty 3 billion pound debt load, equivalent to more than 3 times next year’s EBITDA. They will also have to invest in fast-growing countries like Brazil and the U.S., where Entain’s joint venture with MGM has been losing ground. That will mean pivoting away from Nygaard-Andersen’s M&A strategy, and instead raising cash by selling assets in maturing markets, like Australia. To make such a bold change, Entain would be better off appointing a fresh pair of eyes from outside the group, rather than choosing yet another internal candidate. (By Yawen Chen)
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(The author is a Reuters Breakingviews columnist. The opinions expressed are their own.)
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