Entain shares surge as Corvex becomes major investor
Deal News | Feb 14, 2025 | EIN
Entain's shares saw a significant rise after news broke that Corvex Management, an activist hedge fund, purchased a 5.3% voting stake in the company, making it a top 10 investor. The recent investment reflects ongoing activist pressures within Entain, which has faced leadership instability and regulatory challenges over the past years. Previously, another hedge fund, Eminence Capital, used its influence to effect leadership changes at Entain by securing a board seat. Meanwhile, U.S. peer Draftkings uplifted market sentiment by raising its revenue forecast, contributing to gains in Entain's share price. Eminence Capital's past criticisms of Entain's management strategy, including its stock issuance for the acquisition of STS Holding, align with Corvex's aims to influence leadership decisions, including mergers and acquisitions strategies. The involvement of Corvex follows its initial 4.99% stake acquisition as part of a collaborative hedge fund effort for board influence.
Sectors
- Gambling
- Investment Management
- Activist Hedge Funds
Geography
- United Kingdom – Entain is listed on the FTSE 100 and primarily operates in the UK with familiar betting brands such as Ladbrokes and Coral.
- United States – Corvex Management, a significant investor in Entain, is based in New York, and Draftkings, another influencing factor, is a U.S.-based competitor.
Industry
- Gambling – Entain, as the owner of Ladbrokes, Coral, and BetMGM, operates within the gambling industry, which is subject to regulatory scrutiny and market competition.
- Investment Management – Corvex Management and Eminence Capital are hedge funds actively investing in companies undergoing strategic changes, impacting corporate governance.
- Activist Hedge Funds – The involvement of hedge funds like Corvex Management highlights the role of activist investors in influencing corporate strategy and leadership.
Financials
- 5.3% – Stake acquired by Corvex Management in Entain, making it a major investor.
- 34 million – Number of Entain shares owned by Corvex Management.
- 735.8p – Entain share price after the announcement of Corvex's investment.
- 5.5% – Increase in Entain's share price following the investment announcement.
- 594 million – Cost of Entain's acquisition of STS Holding S.A. criticized by Eminence Capital.
Participants
| Name | Role | Type | Description |
|---|---|---|---|
| Entain | Target Company | Company | An FTSE 100-listed gambling company owning brands like Ladbrokes, Coral, and BetMGM. |
| Corvex Management | Investor | Company | An activist hedge fund based in New York, known for investing in changing businesses. |
| Eminence Capital | Investor | Company | An activist hedge fund that previously secured influence at Entain by obtaining a board seat. |
| Draftkings | Competitor | Company | A U.S.-based gambling company that influenced market sentiment with revenue forecasts. |
| Gavin Isaacs | Former Executive | Person | Former CEO of Entain, whose sudden departure aligns with activist hedge funds' pressures. |
| Jette Nygaard-Andersen | Former Executive | Person | Predecessor to Gavin Isaacs as CEO of Entain, influenced by hedge fund activity. |
| Keith Meister | Founder | Person | Founder of Corvex Management, known for strategic investments and activist positions. |