Home In-Depth Sandler, CEO of Eminence Capital, joins the board at Entain

Sandler, CEO of Eminence Capital, joins the board at Entain

by Bela Ksovreli
415 views 5 minutes read

Entain announced Ricky Sandler’s appointment as non-executive Director. Sandler is the founder and CEO Eminence Capital Investment Management.

Sandler’s appointment to the Entain Board is immediate.

Sandler will join Entain’s People & Governance, and Capital Allocation Committees. Sandler, with the first deal, will help Entain identify an additional nonexecutive board member that Eminence can agree on.

Sandler, who founded Eminence Capital New York in 1999 and led the organization as CEO for more than 25 years, is also a chief investment officer. Sandler also holds the position of chief investment officer.

He co-founded Fusion Capital Management before that and worked as a researcher for Mark Asset Management Corporation.

Entain Chair talks about “substantial growth opportunities”

Sandler, in reflecting on his new position, said that he is pleased to join a company with “enviable positions” across the globe. Sandler said he was looking forward to helping Entain achieve its growth goals on a long-term basis.

Sandler stated that Entain was a strong business, with an array of market-leading products and brands as well as a technology platform unique to the industry. It also had a number of enviable locations in important geographies. I look forward to working alongside my fellow directors in order to achieve Entain’s long-term goals and to create value for the company.

Barry Gibson, chairman of Entain, also welcomed this appointment. Sandler, he said, would enable the group to pursue “substantial growth opportunities”.

Gibson stated, “I’m pleased to welcome Ricky as a member of the Entain board.” Gibson said that Ricky had a thorough understanding of the business, and was confident in its quality and growth potential.

We look forward to leveraging his expertise and perspectives as we strive to create value for Entain’s shareholders.

Sandler criticises STS and urges Entain stake in BetMGM to be sold.

The Sunday Times had suggested Sandler as a possible candidate last month.

His previous remarks about Entain’s stake in BetMGM are perhaps what makes this appointment more intriguing. Sandler had previously asked Entain to either sell the joint venture BetMGM with MGM Resorts or all of it.

Sandler wrote an open letter in June 2023 to Entain criticizing its purchase of STS Poland. Entain began the transaction earlier that month, and completed the PS750m purchase (EUR865m/$948m).

Sandler explained at the time that Eminence held shares in Entain since 2020 and had a stake of 2.1%. Sandler also mentioned that Eminence had regular discussions with Entain’s management about their plans to maximize shareholder value.

Sandler criticized Entain for its decision to finance the STS purchase by issuing approximately 8% shares of Entain’s market capitalization. Sandler called the decision “perplexing in many ways”.

Sandler stated at the time that, “while we support a company’s acquisitions which appear to be rational, financing them with equity highly undervalued is an empire-building, shareholder value-destroying strategy.”

It is not logical that, after rejecting multiple takeover offers at higher prices, the board of Entain issues equity for an asset which is only a “nice to have” at most, at a depressed price.

Sandler raises concerns about share price

Sandler highlighted that the share price of Entain fell by 8% the day after the announcement. This, he said, led to a loss of market value exceeding PS650m.

He then publicly criticized the board of directors and management at Entain, calling them “tone-deaf”.

Sandler stated that “we can confirm that the shareholder in question is angry and that, in view of the recent movement in share prices for the company, we’re not the only ones who feel this way.” As shareholders begin to lose faith in Entain’s ability to create value and allocate capital, they are likely to support the sale of Entain to MGM for a price that is materially below what was previously expected.

The board of Entain and its management will be urged to refrain from making any more value-destroying decisions by Eminence.

Entainment: Changes at the top

Sandler was appointed CEO of Entain after Jette Nygaard Andersen resigned last month.

Nygaard Andersen left the company in December, and Stella David became interim CEO. The boardroom, and board committees were restructured as a result.

Entain has appointed Pierre Bouchut, a board member of Entain’s, as the senior independent director to replace David. Virginia McDowell became chair of the Remuneration Committee and Gibson was appointed chair of People and Governance Committee.

Rahul Welde has been appointed to the People and Governance Committee.

Nygaard Andersen resigned a few days after Entain settled a case with Crown Prosecution Service in relation to historical activities in Turkey.

Entain agreed to pay an Entain financial penalty of PS585.5m ($740.8m/EUR679.0m), a PS20m donation to charity, and PS10m towards HMRC costs and CPS.

STS names new CEO and Chairperson

STS also made changes in its management team last month.

Radim Haluza is the new CEO for Entain CEE, and will continue to be its CEO. Mateusz Juroszek, the long-serving STS CEO, has been promoted to chairman of STS’s supervisory board.

Entain CEE confirms that the STS management structure, plans of growth and the composition of the board remain the same.

Entain CEE, a company focused on Central and Eastern Europe was formed in 2022. Its mission is to acquire companies across the entire region. Entain holds 75% of Entain CEE and Emma Capital the remaining 25%.

Mikolaj Cymerman, the head of Corporate Development at Entain CEE said that the group had been formed in order to maximize the potential of the region.

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