888 Holdings PLC (LSE:888) jumped 16% in early exchanges after an investment vehicle backed by several UK gambling industry veterans revealed a more than 6.5% stake in the owner of William Hill.
The stake is under the name of FS Gaming Investments, according to regulatory filings, which is registered in Delaware in the US and is led by Lee Feldman and Kenny Alexander, respectively the former chair and chief executive of gambling company GVC Holdings, which is now known as Entain.
The vehicle has also received the backing of Shay Segev – Alexander’s successor who oversaw GVC’s takeover of Ladbrokes and the creation of Entain – who has ceded his voting rights to the group.
Analysts at Peel Hunt said: “This well-informed group of investors could contribute to finding a new CEO – accelerating the existing strategy and finding new directions for growth.
“A bid is possible and, if it triggered a refinancing, has the potential to create value by reducing the burden of the debt service cost,” the broker said.
Jefferies read the investment "as a positive endorsement of the 888/William Hill integration opportunity, and opportunistic given 888's low valuation.
"We have previously commented that the 888/WMH deal seems highly similar to the highly successful integration of GVC and bwin, familiar ground for several members of this new shareholder grouping," Jefferies analysts said.
Victoria Scholar at interactive investor said: "This could mark the beginning of significant changes for 888 including the potential for a C-suite and broader strategic shake-up.
"The consortium provides a vote of confidence in the group and arguably could mark the beginning of a more bullish phase for the stock,” she added.
(Adding additional City reaction)