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Ricky Sandler, CEO of activist investor Eminence Capital, has received one of the three seats on Entain’s Capital Allocation Committee.

Sandler was first appointed to the board last month following a successful campaign by Entain’s multiple activist investors.

The chief executive’s nomination was accompanied by a legally binding relationship agreement that limited Sandler’s ability to challenge management on certain issues.

In addition to the Capital Allocation Committee, the agreement stipulated Sandler would hold a place on the People & Governance Committee.

It remains unclear whether this implies that Sandler will be involved in the ongoing search for a new chief executive officer to replace interim CEO Stella David.  

Sandler is joined on the Capital Allocation Committee by current chair Barry Gibson, as well as senior independent director Pierre Bouchut.

Entain attempts a reset through Capital Allocation Committee

The lead-up to the ousting of former CEO Jette Nygaard-Andersen had seen many investors having grown frustrated at the company’s languishing share price, pattern of questionable M&A deals and growing corporate costs.

The formation of the Capital Allocation Committee was announced at the business’ November Capital Markets Day.

Widely considered to be a sop to investors, Nygaard-Andersen said the business had listened to market criticism of its capital allocation strategy.

As such, the committee would help ensure that new priorities for capital would be met. She said these would include a renewed focus on areas with a high ROI, the maintenance of strong balance sheets, and heavy support for cash flow generation.

Sandler had blown the whistle on public criticism of the BetMGM-operator in summer 2023, when he penned an open letter slamming Entain’s “illogical” strategy of funding bolt-on acquisitions through undervalued shareholder capital.

Claiming to have listened to this feedback, Nygaard-Andersen said the business would engage in “a much slower pace of M&A going forward.”

Instead, the business would refocus on boosting its organic growth, which had slowed in several key markets.

However, the planned reset appeared to be too little too late. Days after the Financial Times published an extensive hit piece that quoted 20 advisers, executives, and investors critical of Nygaard-Andersen’s management, she announced her resignation.

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