Entain CEO Jette Nygard-Andersen has told the operator’s Board of Directors of her wish to resign from her post with immediate effect.
Nygaard-Andersen attributed this to the conclusion of proceedings between Entain and the UK’s tax office, His Majesty’s Revenue and Customs, which pertains to historic bribery suspicions related to its former Turkish business which resulted in a £585m pay out.
The Danish executive will leave her role with immediate effect after a near three-year stint in the role which was defined by a flurry of M&A activity.
“The past three years have been rewarding and challenging in equal measure,” Nygaard-Andersen outlined when addressing her resignation.
“The resolution of the HMRC investigation into the legacy business, which was sold by a former management team in 2017, offers a clean inflection point for me and for Entain.
“The Group is now safe, stable and sustainable, and I believe that this is the right time to move on to other business and career opportunities.”
While active M&A dealings saw Entain purchase new companies in European and Latin American markets, the greatest opportunity Entain has identified is its joint venture with MGM Resorts, BetMGM.
While achieving at least $500m revenue growth in each of the last three years, some Entain investors feared that the group was not properly taking advantage of BetMGM in favor of taking on new assets in Europe.
This was exacerbated earlier this year, when Entain purchased Polish market leader STS Group for around $900m. Eminence Capital, one of Entain’s minority investors, wrote to the board to outline its anger with regards to this and exclaimed that all focus should be on maximizing the US opportunity.
The letter read: “We have been explicit that Entain has earned the right to continue its pursuit of strategic targets within the global online gaming industry, but that equally important is funding these deals with the lowest cost of capital.
“We believe that multiple attractive and value-creating paths exist for Entain to raise capital to fund its M&A initiatives, including the potential divestiture of some or all of its stake in the BetMGM JV.”
Furthermore, when Entain’s Q3 results displayed that its organic online revenue was in decline – excluding BetMGM – when analyst fears grew and reports suggested that leadership jobs were on the line.
However, Entain made no reference to strategic failings in the last few years, nor the criticisms leveled at management.
Instead, Chairman Barry Gibson, doubled-down that the conclusion of the HMRC investigation and payout agreement made a sensible time to part ways with the CEO.
Gibson commented: “Under Jette’s leadership, Entain has executed a fundamental strategic shift towards regulated or regulating markets, overhauled its governance, transformed its operations, and significantly improved its customer offering.
“Jette’s decision to leave comes after the resolution of HMRC’s investigation into the Company’s legacy Turkish-facing business. She has offered exceptional leadership during what has been a hugely challenging period.
He continued: “It is no exaggeration to say that the HMRC investigation posed a number of threats to our Group. As the court last week recognised in approving a deferred prosecution agreement (DPA), had the matter not been resolved by way of a DPA, the consequences to the company and all of its stakeholders could have been disproportionate.
“The overhaul of the business model, strategy and culture of the Group in recent years was vital to securing the successful conclusion of a DPA process.
“We are all indebted to Jette for her dedication to steering the company through such a difficult time. She has also led the executive team in devising a new commercial strategy that I am confident will lead to stronger organic growth and a more profitable Entain. On a personal note, I am sorry to see Jette leave the business.”
In the immediate future, Entain has appointed Non-Executive Director Stella David to take on executive duties until a permanent CEO is found.
This is despite the fact that Entain CFO Rob Wood also doubles up as Deputy CEO. Entain has made no comment on Wood’s future, despite him not enacting his Deputy duties in the wake of Nygaard-Andersen’s departure.
Instead, David will take up the CEO role this week until a permanent successor has been found.
David commented: “I have been a Director of Entain for almost three years and have seen up close the extraordinary hard work that Jette and her team have put in overhauling the culture and practices at Entain. I look forward to helping to build on the strong foundations for future commercial success that she leaves behind her.”
