Ladbrokes owner Entain has revealed on Monday that its chief executive officer, Shay Segev, would be leaving the firm, just seven months into his position, and a week after the company declined an $11 billion offer from MGM Resorts International.
Shay Segev handed over his resignation notice as the hostilities between Entain and bidder MGM Resorts increased. He will now join DAZN, a privately held sports streaming network, as co-CEO. DAZN is funded by the billionaire music and oil tycoon Sir Leonard Blavatnik. DAZN offers subscription service rather than pay-per-view. However, though DAZN’s ability to draw such a high-profile figure would cast a spotlight on the company, it leaves Entain with a gaping hole at the top during its bidding contest.
In his statement, Segev said he would have been sad to leave Entain but, he had been offered a role that gives him a very different kind of opportunity.
MGM’s Offer Undervalues Entain and its Prospects
MGM moved in on Entain last week on Monday. Its proposal was for 0.6 shares for each Entain share value of $11.06 billion to the British firm. But the Entain Board said that the offer significantly undervalues the Company and its prospects.
Entain had previously rebuffed the casino giant’s $10 billion all-cash bid according to The Wall Street Journal. Last week, as Entain played hard to get, MGM’s largest shareholder InterActiveCorp (IAC) increased the stakes, agreeing to spend $1 billion to get the deal over the line.
Segev’s departure could leave Entain with a lack of leadership at a time when it sorely requires guidance. In an official statement on Monday, Segev thanked Entain’s great team of leaders, stating that he was leaving the business in good hands. He also emphasized that the recent interest from MGM Resorts had no influence on his decision and that he was fully in support of the board’s decision to reject MGM’s proposal.
Against All Odds
Kenny Alexander, former Entain CEO transformed GVC from a bit-part player on Target to one of the largest gambling companies in the world on the FTSE 100. This he achieved through a series of ambitious acquisitions that at the time saw GVC acquire some of the largest European gambling brands, including Bwin party and Ladbrokes Coral.
Segev joined Entain as Chief Operating Officer in 2016, after which he took over the role of CEO in July 2020. He led the company through the disruption of the COVID-19 pandemic, changed its name from GVC, and vowed to exit unregulated markets by 2023.
Shares in Entain dropped 1.4% in early trade on Monday following news of Segev’s departure. Now trading at 1,455 pence, the company reiterated MGM’s bid of 1,383 pence per share.
But despite his pledge of an extra billion in financial help, IAC Chairman Barry Diller expressed concerns last week as to whether Entain will be eaten by an even larger fish. He stated that it would be great if MGM could do seal the deal with Entain, but whether it will happen of which he is quite skeptical, and if it doesn’t, he’d be bloodthirsty.
Speaking on Segev’s resignation, the Entain chairman said, “we are sorry that Shay has decided to leave us, but we accept that we cannot match the offer that he has been given”. He asserted that Segev’s decision to leave changes nothing concerning the takeover bid from MGM, which he repeated, still significantly undervalues the company and its prospects.
Segev will continue in his current position at Entain for six months or until a replacement has been duly appointed.