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Dodge & Cox Becomes Entain’s Second Largest Share Holder

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US-based mutual fund company Dodge & Cox has doubled its stake in gaming firm Entain. It is now greater than 10%, making the company the second-largest individual shareholder.

The investment firm increased its share from just over 5% to 10.33%, equating to 66,001,318 voting rights. The Capital Group Companies holds the position of the largest single shareholder with a 14.81% stake in Entain.

Entain Part of Diverse Portfolio

Dodge & Cox initially invested in Entain in September last year. It has a diverse portfolio of investments, including in pharmaceutical heavyweight GSK and tech conglomerate Alphabet. By the end of 2022, the company, with headquarters in San Francisco, reported having $323 billion in assets under its management.

Following the announcement on 6 November, Entain's stock value experienced a slight uptick, closing at £954, which is a 0.11% increase.

Revenues Up for Entain

At the same time as the rise in its shares, Entain disclosed a third-quarter revenue surge of 7%, marking progress across all divisions of its operation.

The company's online segment reported a 9% increase compared to the same period last year, propelled by sports and gaming revenues. Retail revenue, which encompasses operations in various countries, including the UK and New Zealand, also saw a 4% rise.

In the United States, the joint venture BetMGM, shared with MGM Resorts, observed an 8% rise in net gaming revenue, totaling around $458 million, according to Entain.

Entain has outlined strategic initiatives aimed at enhancing its operations. These initiatives include focusing on markets with potential for organic growth and high returns, such as the US and Central and Eastern Europe, underscored by the recent acquisition of STS. Additionally, Entain aims for profitable expansion in established markets like the UK and Italy.

The company has also announced its intention to attain an online EBITDA margin of 28% by 2026, escalating to 30% by 2028 through a project named Romer. This will involve streamlining operations to heighten efficiency and achieve cost savings of £100 million by 2025. Enhancing governance is another goal, marked by the appointment of new non-executive directors, including Amanda Brown.

Plans for Further M&A Deals

Merger and acquisition activities are a clear focus for Entain's future growth. The acquisition of Angstrom Sports and the takeover of SuperSport in Croatia exemplify this strategy. Furthermore, the company has executed several smaller M&A deals, such as the purchase of Tiidal Gaming NZ.

However, a recent decision by Entain to reduce B2C operations at its Unikrn esports betting branch indicates a strategic shift in its esports business approach.

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