William Hill owner 888 ends talks with FS Gaming Investments
The gambling giant said it had ‘no option’ but to terminate talks because it risked losing licences to operate in the UK.
Gambling giant 888 has seen its share price plunge by more than a fifth after revealing it has ended discussions with FS Gaming Investments over the proposed appointment of a new leadership team.
The William Hill owner said it had “no option” but to terminate talks because it risked losing licences to operate in the UK.
The discussions centred around the proposed appointment of three executives backing FS Gaming, which built a 6.6% stake in 888 last month.
The investment vehicle suggested appointing Lee Feldman, Kenny Alexander and Stephen Morana as chair, chief executive and chief financial officer, respectively.
All three are also former board members of rival gambling group Entain, which owns Coral and Ladbrokes.
However, following in-depth regulatory due diligence including engaging closely with the GBGC, the board had no option but to terminate discussions as it simply could not put licences in our largest market at significant risk
Entain is embroiled in a four-year investigation over possible breaches of the Bribery Act from its former subsidiary in Turkey.
The company said it could face a substantial financial penalty when the investigation by the Crown Prosecution Service concludes.
888 said it examined “all potential risks” related to the misconduct allegations, and had been in talks with the GB Gambling Commission (GBGC) over the potential to have Entain’s former leaders at its helm.
It said it had concerns over the fact Mr Feldman, Mr Alexander, and Mr Morana were all in senior leadership positions at the time the possible wrongdoing allegedly took place.
As a result, 888’s board decided that any attempts to bring about a corporate reshuffle could “put the group’s licences to operate in the UK at immediate and significant risk”.
The GBGC is unlikely to approve the proposed new leaders, it said.
Lord Mendelsohn, the executive chair of 888, said: “As a board we devoted significant time to considering FS Gaming’s proposal.
“However, following in-depth regulatory due diligence including engaging closely with the GBGC, the board had no option but to terminate discussions as it simply could not put licences in our largest market at significant risk.
“While this engagement temporarily interrupted the very thorough search process to appoint a new CEO, the board is finalising its appointment and expects to make an announcement in the very near future.”
888’s former chief executive Itai Pazner left the company at the start of this year after four years in the role and overseeing the ?1.95 billion acquisition of the William Hill business, which included around 1,500 betting shops.
Its finance boss Yariv Dafna is expected to leave at the end of the year.
Shares in 888 dropped by more than 24% on Friday afternoon following the announcement.