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Ladbrokes owner Entain CEO quits days after snubbing MGM approach

01/11/2021 | 04:37am EDT
FILE PHOTO: General view inside a deserted Ladbrokes shop in Harpenden

(Reuters) - Ladbrokes owner Entain said on Monday its Chief Executive Officer Shay Segev was leaving the gambling firm after just seven months in the role, a surprise move after the company last week rejected an $11 billion approach from MGM Resorts International

Segev, who will remain in his current role for six months or until a successor is in place, will join global sports streaming platform DAZN as co-CEO. He said MGM's approach had no bearing on his decision to leave.

Entain, shares of which fell 1.4% to 1,455 pence in early trade, reiterated that MGM's proposal of 1,383 pence per share significantly undervalued the company. It has asked MGM for more information on the strategic rationale for a combination.

"This changes nothing with respect to the Board's view of the recent proposal from MGM Resorts International to acquire Entain," Chairman Barry Gibson said.

However, analysts at Jefferies and Peel Hunt suggested that Segev's exit makes a takeover by MGM more likely.

"The timing is especially awkward given the ongoing situation with MGM, but we think MGM may now be more encouraged to opportunistically raise its bid," Jefferies said, adding that it saw a 1,650 pence valuation for Entain, around 20% higher than MGM's current proposal.

In a separate statement, DAZN said Segev's background in technology and digital transformation at Entain and previously Playtech meant he was ideally positioned to help the company grow.

As CEO, Segev, who joined Entain in 2016 as chief operating officer, steered the company through pandemic-led disruption, promised to exit unregulated markets by 2023 and changed the company's name from GVC.

Entain had expanded rapidly under Segev's predecessor, long-time CEO Kenny Alexander, from high street betting into an online gambling powerhouse through a series of acquisitions such as the bwin, Coral and Eurobet brands.

"We are sorry that Shay has decided to leave us but recognise that we cannot match the rewards that he has been promised," Entain's Gibson said.

(Reporting by Tanishaa Nadkar in Bengaluru; Editing by Rashmi Aich, Kirsten Donovan)

By Tanishaa Nadkar

ę Reuters 2021
Stocks mentioned in the article
ChangeLast1st jan.
MGM RESORTS INTERNATIONAL 0.95% 38.4 Delayed Quote.21.87%
PLAYTECH PLC 0.90% 380.8 Delayed Quote.-5.56%
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