Entain shares bounce as activist investors pile on pressure
Ladbrokes owner Entain closed higher on Wednesday amid reports that it is facing growing pressure from activist investors.
According to the Financial Times, two more US activist hedge funds have voiced concern over the FTSE 100 firm’s share price performance and the ability of chief executive Jette Nygaard-Andersen.
Sachem Head Capital Management and Dendur Capital have reportedly built positions in the company. The funds join Eminence Capital which expressed worries with Entain back in June.
The activist investors are concerned about Entain’s poor performance in its core markets where regulators have tightened regulation on the online betting industry. They also have grievances with management’s costly deals.
One person familiar with the activists’ thinking told the FT that Entain had suffered from “a lot of self-inflicted wounds” and said shareholders had “lost faith” in Nygaard-Andersen.
Entain’s share price is down by more than a third in the year-to-date, sitting at a three-year low. In contrast, shares in rival and Paddy Power owner Flutter Entertainment are up 13 per cent so far this year.
Entain told City PM: “We constantly engage with all of our shareholders, and are committed to constructively addressing any questions or concerns that they may have.
“The executive team recently laid out a clear plan, with the full support of the Board, to accelerate the actions that we are taking to drive sustainable organic growth, expand our margins, strengthen the team, capitalise on the US opportunity, and deliver long-term value for our shareholders. We remain confident in our ability to deliver on the significant growth opportunities that are ahead of us.”