Entain confirms plans to reduce stake in CEE business
Entain will initially sell a 20 per cent stake in the parent company of SuperSport and STS, leaving it on an equal footing with its joint venture partner.
UK.- The FTSE 100 gambling operator Entain has confirmed that it plans to begin winding down its Central and Eastern Europe (CEE) operations. The operator will begin by selling a 20 per cent stake in Entain CEE to EMMA Capital, the joint venture partner with which it created the regional business in 2022.
Under the agreement announced today (June 25), EMMA will pay €395m upon completion, with a further payment due in early 2027 tied to Entain CEE’s full-year performance. The total consideration will be roughly €425m, which values the CEE business at €2.1bn.
Completion of the transaction is expected in Q4 2026, subject to regulatory clearance. Entain will still retain a stake in the business, but this will be reduced from the current 67.5 per cent to 47.5 per cent. EMMA’s stake will rise to the same level, giving it equal participation in the business, while the Juroszek family will retain its 10 per cent interest.
The joint venture began life in November 2022 with the acquisition of a 75 per cent stake in SuperSport, the Croatian sportsbook. After that, Entain CEE bought STS Holding in August 2023 with EMMA funding 25 per cent of an acquisition that valued Poland’s largest betting operator at roughly £750m.
Entain said one of the reasons for reducing its stake was shareholder value. The costly push into Eastern Europe has long divided shareholders. US investor Ricky Sandler, who held around 2.1 per cent of Entain at the time, was one of several who publicly criticised the STS acquisition, objecting to the £600m bookbuild used to finance the takeover.
Sandler joined Entain’s board as a non-executive director in January 2024, but earlier this year his fund Eminence Capital shut down after 27 years, with Sandler exiting both Entain’s board and his 6.5 per cent shareholding. Entain said today that it now aims to simplify the group’s structure and maximise returns, while realising gains since forming Entain CEE in 2022. It also aims to gain financial flexibility: Entain intends to direct proceeds from the sale towards reducing its debt load, intending to cut leverage below 3x and return excess capital to investors.
“Our initial divestment is a decisive first step towards Entain fully exiting Entain CEE and reflects our ongoing focus on maximising value for shareholders,” CEO Stella David said. “This enables us to unlock the value created by our Croatian and Polish businesses and demonstrates our robust capital allocation discipline.
“Driven by structural growth across our globally scaled portfolio and our improving operational execution, I am confident in our ability to deliver strong future cash-generation. Entain remains well positioned to be a long-term industry winner.”
Entain’s updated guidance and market reaction
As a result of the planned divestment, Entain has revised its full-year outlook. Online NGR growth is still expected to come in at 5 to 7 per cent in constant currency, but online EBITDA margin guidance has been lowered from a range of 23-24 per cent to 21-22 per cent.
Entain said it remains aligned with consensus forecasts of £1.13bn in group underlying EBITDA, based on 11 analyst estimates. It continues to target £500m in annual adjusted cashflow by 2028. Further details will be provided with interim results on August 13.
Entain’s share price on the London Stock Exchange was up by 3.6 per cent today to £5.74 at the time of writing, but it remains down by 25.5 per cent for the year to date.
