View from the City: Activist mindsets could boost 888’s share price
RB Capital co-founder Julian Buhagiar predicts the future of 888 following a recent investment from industry heavyweights
It is indeed debatable whether any areas of activist investment are currently more exciting than in gambling. And this has been a gradually ongoing trend – just witness the last few years with Icahn and Caesars, Corvex – as well as Starboard – and MGM, Arviv and Bragg, and SpringOwl alongside the (now-disgraced) Odey and Playtech.
We now have another developing activist story, this time with 888. In a series of clearly planned chess moves, there seems to be a shake-up about to take place at the home of William Hill, Mr Green and the rest of the triple-8 entertainment brands. Unlike other hip-bearded activists, such as Just Stop Oil, whose raison d’être so far seems to be halting otherwise functioning highways and tennis matches, this group of activists seem to be driving an actual tangible outcome for the good of the group.
To those unfamiliar with latest developments, the most recent move by HG Vora (increasing its stake above the required disclosure threshold) alongside FS Gaming Investments (featuring Kenny Alexander and Shay Segev alongside notable gaming investors), seems to be a well-planned strategy with an obvious outcome. Given the relatively low share price (at the time of writing, just over £1 – down from its peak of £4.58), it represents an opportune time for more activists to come on board, likely with a mandate to first insert their own management team; and in stark opposition to the efforts run by 888’s current chair, Lord Mendelsohn.
If properly managed, among other immediate benefits, this new activist mindset could help reduce 888’s overall net debt at a time when interest rates are dangerously punishing the group’s ability to repay its loans. Given this stealth drive, it’s not unlikely that Kenny will be nominated to lead this group, similar to that of his tenure at Entain (formerly GVC).
Once this new management team is in situ, it’s likely that the next step would be to expedite the integration with (recently acquired) William Hill assets and thus increase revenue synergies across both brands. And when that happens, there will be a much-needed boost to the share price, possibly eclipsing 2022’s highs.
So, sit back and watch the action unfold in the coming months. Whichever faction wins over, it will be actively entertaining, that’s for sure.