Entain, the FTSE-100 gambling conglomerate and owner of Ladbrokes and Coral, has enlisted the expertise of corporate finance boutique Oakvale Capital to advise on the sale of PartyPoker, once a dominant player in online poker. This strategic move is seen as an attempt to rejuvenate its core operations while warding off activist investors.

PartyPoker, a subsidiary of PartyGaming, was valued at a staggering ￡5 billion during its London flotation in 2005. However, industry insiders who have been approached about the sale anticipate it to fetch around ￡150 million, marking a significant depreciation in its valuation. This decline is attributed to a mass exodus of customers in recent years, rendering the business non-core to Entain’s operations.

Towards a leaner portfolio

Entain’s strategic divestiture of PartyPoker may seem a modest yet decisive step following the turbulence faced by the company over the last year and the persistent intervention by activist hedge funds. But it is a calculated move aimed at stabilizing shareholder value to reposition the company for the future. While the sale of lesser-known brands might not immediately quell the concerns of activist hedge funds, it signals Entain’s commitment to a leaner, more focused portfolio.

The potential sale of flagship brands Ladbrokes and Coral still looms large, promising to be the answer needed to redefine market dynamics and stakeholder expectations. As Entain navigates through regulatory reforms and market fluctuations, its pursuit of strategic growth and shareholder satisfaction remains undeterred. The industry watches with bated breath, as Entain’s next moves could very well dictate the tempo of the betting sector’s future. Indeed, ‘watch this space’ is the apt mantra for those tracking the unfolding narrative of Entain’s corporate saga.

Daring gamble to salvage core business

Entain’s portfolio extends beyond Ladbrokes, encompassing Coral and a stake in BetMGM, a significant player in the US betting market. Despite this, the company has faced a tumultuous period, with activist investors gaining an increasingly prominent position on its share register.

The company’s shares have plummeted by over 40 percent in the past year, whilst facing a barrage of regulatory issues. Currently, the company is under the interim leadership of Stella David, following the departure of Jette Nygaard-Andersen late last year.

Entain’s shares have been trading at approximately 739p, resulting in a market capitalisation of just over ￡4.5 billion.

Both Entain and Oakvale Capital have declined to comment on the sale.