Entain’s shares fell this morning, after the FTSE 100 gaming group raised approximately £600 million in order to fund a Polish acquisition worth £750 millions.
Ladbrokes, Sportingbet and Emma Capital’s joint venture Entain CEE will purchase STS, the Polish sports betting company, from STS. Entain, which is a joint venture between Emma Capital and Ladbrokes, owns 75% of Entain CEE. The company was set up in order to target deals across central and eastern Europe.
Yesterday, shares in Entain (formerly GVC Holdings) fell 115p or 8.7 percent to £12.06 as investors who were unable to participate in the share placement faced the dilution their holdings. The new shares represent 8.3 percent of the capital before the announcement.
Merrill Lynch, Morgan Stanley and Santander were the co-managers of the placement of 48.29 millions new shares priced at £12.30 per share. Subscribers for 486,000 shares were attracted by a retail offer made via the PrimaryBid Platform.
The placing price represents a discount of approximately 6.9% to yesterday’s closing price of £13.22. Entain expressed its “satisfaction” with the support received by new and existing investors.
The company has £150million to fund future “near term” acquisitions. The enterprise value of STS, however, is approximately £690 millions.
STS has been listed at the Warsaw Stock Exchange. However, Mateusz Juroszek is the CEO and Zbigniew Juroszek is the father.
After completion, the Juroszek Foundations intend to reinvest a portion of their proceeds in Entain CEE for a 10% economic stake in the joint-venture. Mateusz Juroszek will remain as the chief executive officer of STS, and join the board of Entain CEE.
STS claims that it is the leading sports betting operator in Poland with around 40% of the market. It gets 82 percent of its gaming revenue online, and it is the largest retail operator with 400 betting shops.
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