Entain confirms Eminence Capital boss to Board of Directors

Eminence Capital and its boss, Ricky Sandler, have been some of the most outspoken critics of Entain Group over the past several months, with Sandler repeatedly taking hits at the company for its chronical underperformance in terms of stock value, as reported previously.

Sandler and Eminence Capital, which has been the most active investor in the company, announced last year that they would seek to install himself on the Board of Directors at the company, motivated by a determination to pursue added value for shareholders and the company’s stock. He will now have this opportunity as he is stepping onto the Board of Directors as a non-executive director.

Sandler has been known to take swings at the leadership, including former Group CEO Jette Nygaard-Andersen, accusing the company of systematically undermining its own performance by engaging in questionable mergers and acquisition deals for one. He has been pushing for a more hands-on approach in the Group’s affairs and Entain seems to have agreed.

Commenting on his appointment, Entain Chair Barry Gibson said that Sandler was a person who understood the business and had a firm grasp of the company’s needs. The announcement that Sandler is joining in has indeed had a rejuvenating effect on the Group’s stock, with Entain trading slightly up on Wednesday and Thursday.

Sandler has not hesitated to issue stern rebukes regarding Entain’s moves in the past, arguing at one point that he and Eminence Capital were happy to continue backing Entain as long as it didn’t engage in funding its deals with undervalued equity. He called this a value-destroying strategy.

The news was welcomed on an upbeat note by analysts and observers. AJ Bell Investment Director Russ Mould was among the people to hail the change in leadership and said that Entain is indeed moving higher on the news that Sandler is joining.

Following the departure of its former executive, added Mould, the company does indeed need to find its direction. Sandler is indeed a person who could help Entain Group explore new avenues of opportunities and deliver on them.

One thing that is likely to happen though is to see Sandler suggest that Entain divests from its joint venture with BetMGM, although it’s not yet clear how this will help Entain’s fortunes moving forward. The United States is generally considered to be one of the most important markets in the world, but then again – it’s also one of the most expensive to maintain a presence in.

Sandler seems to realize this, and he very likely has other plans for how he can drive value for the company. Eminence Capital is only a part of the long list of activist investors who have chimed in to make their case about fears of declining value.

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