Apollo, CVC reportedly interested in Entain's gaming brands

Recent media reports suggest that private equity firms Apollo Global Management and CVC Capital are among those considering bids for Entain's various gaming brands. This speculation arises following news of Chairman Barry Gibson's impending departure from the Ladbrokes owner, as reported by British newspaper The Times.

Entain has reportedly enlisted financial advisory firm Moelis to explore potential divestments of several entities, including BetCity, Enlabs, Ladbrokes Australia, and CrystalBet.

This move aims to refocus the company on its core operations amidst pressure from activist investors, including Eminence Capital founder Ricky Sandler, who recently joined Entain's board.

Criticism mounted against Entain's strategy under former CEO Jette Nygaard-Andersen, particularly concerning a series of acquisitions. The company's recent missteps have fueled demands for change within its leadership ranks.

Apollo and CVC emerge as practical contenders for Entain's assets, given their respective histories within the gaming industry. CVC Capital, previously owning Sky Bet and holding a majority stake in Tipico, brings substantial experience to the table. Similarly, Apollo, known for managing the Venetian in Las Vegas, has a track record of investments in the gaming sector.

In 2021, Apollo was involved in bidding for William Hill's international operations, indicating its interest in gaming industry consolidation. The private equity giant also owns Canadian casino assets and an Italian sportsbook company.

While it remains unclear which specific Entain brands might attract private equity interest, BetMGM stands out as a key asset in its portfolio. Entain holds a 50% stake in BetMGM, raising questions about its role in any prospective asset sale. MGM Resorts International, which owns the remaining half of BetMGM, has previously expressed interest in acquiring full control of the brand.

Speculation regarding MGM's intentions has been fueled by Corvex Management's acquisition of a 4.4% stake in Entain last December. Keith Meister, a key figure at Corvex Management, is also a member of MGM's board. However, MGM has downplayed any immediate takeover talks following the rejection of a bid in January 2021.