Departure comes days after rejection of MGM takeover bid
The company behind PartyPoker and Bwin announced on Monday that Chief Executive Officer, Shay Segev had tendered his resignation after only seven months in the role. Segev will be moving on to DAZN, the sports streaming website, as co-CEO.
The news comes just days after Entain agreed to acquire ENLABS – one of the Baltics fastest growing gambling providers – and means the online gaming giant will have its third CEO in under a year after the departure of long-time leader Kenny Alexander last July.
Alexander joined Entain, then known as GVC, back in 2007 and grew the $40 million company into an online gambling behemoth after swallowing up Bwin.Party for $1.5 billion in 2016. Ladbrokes Coral – the leading British bookmaker – was Alexander’s target the following year in another $5.5 billion takeover. He passed the reins to Segev in the summer with Entain riding high on surging player traffic from Covid-19 lockdowns.
Segev left another gaming company, Playtech to join Entain as Chief Operating Officer in 2016 right at the start of their growth boom. Many in the industry expected him to continue the path set by Alexander after taking over but on January 4 of this year any chance of smooth sailings came to an abrupt end as MGM launched an unsolicited takeover bid.
US gambling giant seeks online foothold via Entain
The $11 billion offer was immediately rejected by Entain’s board of directors as it “significantly undervalues” the company and its future prospects. Shares of Entain are up by over 25% since news of the takeover broke indicating the market expects another suitor or a boost in the offer price from MGM.
For MGM, Entain is vital to its future growth into the online gambling market as fellow US rival Caesars Entertainment already spent $4 billion in September to buyout UK bookmaker William Hill. The acquisitions are spurred by a 2018 US court ruling that overturned a ban on sports betting outside Nevada. With it now legal in all states, the traditional brick and mortar casino companies like MGM and Caesars are seeking to buy their way into the market through existing companies like Entain that have the experience from operating in the European market.
Departure of Segev increases merger odds
Although Segev will remain with Entain for six months while the company searches for his replacement, analysts see the CEO’s departure as an indication the outgoing leader felt the merger was going to succeed.
“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,” analysts at Jefferies, a UK investment banking firm, said in a note released after news of the resignation broke.
According to Entain Chairman Barry Gibson, Segev’s departure, “changes nothing in respect to the Board’s view of the recent proposal from MGM Resort’s International to acquire Entain.” The company is still waiting on a report from MGM on the “strategic rationale” for the combination of the two companies.
DAZN aiming to dominate sports streaming world
Founded by Ukrainian-born, British-based business Sir Leonard Blavatnik, DAZN is a subscription sports streaming service that beams high profile games, such as the Champions League and UK Premier League, around the world. Segev is the latest in a string of executives to land with the growing firm – many lured by the deep pockets and generous compensation packages offered by Blavatnik.
“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 bluntly said.
With rumoured stock options and the potential to cash in millions when DAZN eventually goes public, Segev sure does seem to have hit opted to chase the nuts in his move away from the poker world. Time will tell if the decision was correct and what the future holds now for Entain.