Former GVC Chief joins UK gambling group to buy stakes in vehicle buying .An investment vehicle backed by a host of former board directors of gambling group GVC, including onetime chief executive Kenny Alexander, has taken a 6.5 per cent stake in William Hill owner 888, spotting an opportunity in the bookmaker’s low share price.
FS Gaming Investments also has the support of GVC’s former chairman Lee Feldman, and Shay Segev – Alexander’s successor. Segev was in charge of GVC’s acquisition of Ladbrokes as well as the creation of Entain. Segev – who runs streaming service DAZN – ceded all his voting rights to FS Gaming Investments.
The investor group revealed its 6.57 percent stake on Tuesday. It believes that the stock of 888 is undervalued due to a number of compliance failures, and a large debt load after its £1,95bn acquisition of William Hill.
888, which was responsible for the money laundering process at the time, had its CEO fired on that same day after it revealed they were not following their processes.
After an internal investigation, 888 restored the accounts but continues to search for a new chief executive. Lord Jonathan Mendelsohn is 888’s chairman and Labour peer. He currently runs the company as an interim along with finance chief Yariv Daffna.
Following the announcement, shares in the London listed group, which had been ejected earlier this year from the FTSE 350 Index, rose 14 per cent, to 80p. The stock has still fallen 60 percent over the last year.
According to two sources familiar with the situation, although the investor group has not yet met with 888 management, it is likely to press for a faster integration between William Hill and 888 to reduce costs. It could also request that Alexander or Feldman be given a seat on a board.
People close to the investor group have acknowledged that 888 may be a target in the long term for a partial or full takeover by another betting company or private equity. One person said, “It is a quality asset that’s undervalued.” There are some high-quality brands in the industry, and there are also top-quality individuals.
Alexander’s involvement with the investment vehicle is his first venture in the betting industry since a surprise exit from GVC, in 2020 where he announced retirement after 13-years as GVC chief executive.
The UK tax authorities launched an investigation into corporate misconduct and bribery in GVC’s former Turkish affiliate Sportingbet. Alexander was responsible for the purchase of Sportingbet and its sale six years later.
The investor group also includes Stephen Morana, a venture capitalist at KM Capital, a former independent board member of Entain, as well as B. Riley Financial, and its chief finance officer Daniel Shribman.
A spokesperson for 888 said that they welcomed the investment by FS Gaming, which they believe reflects our significant value creation potential. They also added that the board is “highly confident” in their long-term strategy of maximising value for shareholders.