Ladbrokes owner Entain PLC (LSE:ENT) has taken the first step towards exiting its Central European business, agreeing to offload a 20% stake for £366 million in a deal that analysts said highlights the discount at which the gambling group trades.
The FTSE 100 group, which currently owns 62.5% of Entain CEE, is selling the stake to joint venture partner EMMA Capital, reducing its holding to 47.5%.
The transaction values the business at about £1.9 billion, equivalent to around 10 times EBITDA.
That compares with Entain's own valuation of about 6.3 times forecast 2026 EBITDA, prompting analysts to argue that the disposal underlines the group's undervaluation.
Shore Capital said the transaction was "a clear positive to the investment case given current valuation metrics" and noted that stripping out Entain CEE at the implied sale price leaves the remainder of the business trading at less than six times EBITDA.
Net proceeds from the sale will be used to reduce debt, with analysts estimating the deal will cut Entain's leverage ratio by around 20 basis points to below three times EBITDA on a look-through basis, while annual interest savings of around £20 million should leave earnings broadly unchanged.
Although management has not set out a timetable, it said it expects to exit Entain CEE fully in due course, with future proceeds likely to be used both to reduce leverage and return excess capital to shareholders.
Shore Capital said the improving balance sheet strengthened the case for a share buyback from the end of the 2027 financial year, particularly if Entain completes the sale of its remaining Central European stake.
