Breaking: Alexander and Feldman’s 888 stake
Former GVC execs are among investor group taking a 6.6% stake in 888
Good morning. A breaking news special this morning looking at the news from late Tuesday about FS Gaming Investments taking a stake in 888.
Breaking: 888 stake
An investment vehicle led by former GVC chair Lee Feldman and including ex-GVC CEO Kenny Alexander has taken a 6.6% stake in 888.
Getting the old gang back together: An investment vehicle called FS Gaming Investments, which has Feldman, Alexander, Stephen Morana, ex-Betfair, and Daniel Shribman from the investment bank B Riley among its shareholders, has bought a 6.6% stake in 888.
In an RNS filing FS said Shay Segev, ex-Entain CEO and currently CEO at DAZN, had transferred an existing 2% stake to FS.
Get active: Bloomberg quoted Feldman as saying the investor would be pushing for change to boost the company’s value.
“We think these are great assets that are currently undervalued,” Feldman told the news service.
Catalyst: The news sent 888’s shares flying late on Tuesday, up over 14% on the day. This morning, they added a further 18% in early trading. Analysts at Peel Hunt said they believe this group has the “potential to accelerate, catalyse and even direct strategic change”.
🍆 888 gets a boost on news of the FS stake
Recall, 888 is currently without a permanent CEO after previous incumbent Itai Pazner resigned in the wake of its Middle East VIP compliance scandal. The company is currently being led by executive chair Lord Mendelsohn.
Peel Hunt said the “well-informed” investor group could contribute to finding a new CEO while “accelerating the existing strategy and finding new directions for growth”.
“A bid is possible and, if it triggers a refinancing, has potential to create value by reducing the burden of the debt service cost.”
Beast of burden: In late November, 888 admitted its leverage was stretched by its exposure to rising interest rates.
Deal Talk instants: Sources pointed to the awkward timing of the announcement given the ongoing HMRC investigation into Entain’s previous dealings in Turkey at a time when both Feldman and Alexander were at the top of the-then GVC.
Just last week, Entain said it was in discussions with HMRC over a potential deferred prosecution agreement and “substantial” fine.
It is not known whether individuals including former CEO Alexander are also under investigation.
“I guess that they must believe that 888 can trade its way out from under the debt burden, in which case the equity is very cheap,” said one corporate advisory source.
Another source said “these guys are dealmakers… this is opportunistic”.
“It’s the old GVC playbook. Get company, turn it around. But the size of the debt could be an issue. This is higher stakes.”
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Weekender
Coming up in this week’s Weekender edition on Friday:
Bottom of the ninth: A’s Vegas bid goes down to the wire.
Coinbase crisis.
Sector watch looks at this week’s news on Saudi Arabia’s sporting investments.
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Jun 8: Gaming in Holland
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