It is never dull when activist investors take an interest in a high-profile company. For Entain PLC (LSE:ENT), this week’s comments from Sachem Head Capital Management have again stirred the pot.
Scott Ferguson, the hedge fund’s founder, told Reuters that he believes Entain’s share price could double over the next few years, arguing that “you are getting paid to wait for BetMGM to inflect”.
Sachem Head is one of four activist investors now circling the Ladbrokes and Coral owner, alongside Corvex Management, Eminence Capital and Dendur Capital.
According to the report, the group may explore strategic options for BetMGM, the online betting joint venture between Entain and MGM Resorts.
These could range from Entain buying MGM’s stake to a merger between the two companies, or even MGM taking full control of BetMGM.
Citi notes that two of those possibilities, a merger or outright bid, were already the subject of recent market chatter about a renewed approach from MGM.
Ferguson, however, struck a more relaxed tone, saying Sachem Head was “comfortable with the status quo”.
Even so, the comments are likely to rekindle speculation over corporate manoeuvres around Entain... and should keep investors’ attention firmly on the table.
The price action over the last month is interesting. Rather than piquing investor interest, the recent speculation appears to have had the opposite effect.
Over the last 30 days, the stock is off 6%. Zooming out to the last six months, the story is a different one with Entain up 42% with the MGM JV recognised as a real value generator.