Entain has appointed Ricky Sandler as a Non-Executive Director, effective immediately. Sandler, Founder, CEO, and CIO of Eminence Capital LP, will join the People & Governance and Capital Allocation committees within the company.
Barry Gibson, Entain’s Chairman, expressed satisfaction in welcoming Sandler to the Board, saying, “I am pleased to welcome Ricky to the Board of Entain. Ricky has a deep knowledge of our business and a firm belief in the quality of our operations and substantial growth opportunities. We look forward to benefiting from his perspectives and expertise as we work to drive value for all Entain shareholders.”
Sandler then expressed: “Entain is a robust business with brands, a unique technology platform and enviable positions in key geographies around the world. I look forward to working with my fellow directors to help Entain achieve long-term success and create lasting value for its shareholders.”
Sandler, however, will not be deemed an independent non-executive director under the UK Corporate Governance Code. A relationship agreement has been drafted between the company, Eminence Capital, and Sandler, including governance, standstill, and voting provisions.
Sandler founded Eminence Capital in 1999, which now oversees a $6.5 billion investment portfolio spanning global financial markets. As a CEO and CIO, he supervises strategic direction and controls Eminence’s investment team.
“Entain has recently faced financial scrutiny, including a share price decline and various other challenges, including a fine and recent controversial acquisitions. Its stock, though, is up 3% after this news”
Eminence Capital possesses approximately 2% ownership of Entain’s overall outstanding shares and publicly condemned the board of directors in an open letter in 2023. Eminence vehemently opposed Entain’s proposed takeover of STS Holdings, describing it as detrimental to shareholders’ interests. The firm criticized Entain’s approach of valuing STS at 12 times earnings before interest, taxes, depreciation, and amortization (EBITDA) while issuing Entain shares at 7 times EBITDA, leading to a notable decrease in Entain’s market valuation.
This pattern aligns with the industry, as hedge funds like HG Vora Capital Management endeavor to implement strategies aimed at boosting shareholder value. HG Vora, holding an 18.5% stake in Penn Entertainment, pursued positions on the company’s board. Worries regarding Penn’s undervalued shares prompted discussions with the company’s management to address these issues.
Entain’s latest social impact report reveals its support for more than 200 athletes spanning various sports and its financial aid to 100 non-league football clubs via the Pitching In initiative. However, the company has recently faced financial scrutiny, evident in a decline in its stock price and several other challenges, notably a hefty £585 million ($737.4 million) penalty related to past operations in Turkey. Nonetheless, following this announcement, the company’s stock has risen by 3%.
