Nygaard-Andersen resigns at a tumultuous time for the business.
The company recently agreed a £615m deferred prosecution agreement with HMRC that also saw the business make a legally binding commitment to exit unregulated markets.
In a short statement, Nygaard-Andersen said the resolution of the HMRC investigation offered a “clean inflection point” for her to exit Entain.
“The group is now safe, stable and sustainable and I believe that this is the right time to move on to other business and career opportunities,” she added.
The CEO’s leadership had come under increasing criticism from shareholders in recent months for poor operational performance and a declining share price.
Eminence Capital fired the first shots in June after blasting Entain’s capital allocation approach and decision-making processes.
It highlighted a “shareholder value destroying strategy” of funding bolt-on acquisitions using undervalued company stock following the acquisition of Polish bookmaker STS.
Reset fails to calm investors
Entain attempted to address these concerns in a recent Capital Market Day, in which it committed to a slower pace of M&A and announced the formation of its first-ever capital allocation committee.
Nevertheless, New York funds Sachem Head Capital Management and Dendur Capital recently ed Eminence in demanding changes across the business.
The Financial Times reported that the activist investors wanted Eminence founder Ricky Sandler appointed to the board and handed responsibility for filling the outstanding vacancies.
Just days ago, the FT released another piece which detailed “mounting internal discontent” over Nygaard-Andersen’s leadership.
It quoted 20 executives, shareholders and advisers who highlighted “growing dissatisfaction” with the business’ leadership.Areas of criticism included sluggish performance in core markets, poorly thought-out M&A deals and questionable leadership decisions.
Under Nygaard-Andersen’s leadership, the company rejected acquisition overtures from US corporations such as DraftKings that would have valued the business far above its current market cap.
Nygaard-Andersen’s sustainability push
Despite questionable operational performance under Nygaard-Andersen, there is no doubt her tenure saw the company embrace sustainability, including player protection and reduced grey market activity.
In a statement, Entain chairman Barry Gibson highlighted this as key to guiding the business through its recent legal problems.
“Under Jette’s leadership, Entain has executed a fundamental strategic shift towards regulated or regulating markets, overhauled its governance, transformed its operations, and significantly improved its customer offering,” he said.
“As the court last week recognised in approving a deferred prosecution agreement, had the matter not been resolved by way of a DPA, the consequences to the company and all of its stakeholders could have been disproportionate.
“The overhaul of the business model, strategy and culture of the group in recent years was vital to securing the successful conclusion of a DPA process.”
In the summary judgement for the DPA, the court recognised that opting to prosecute Entain instead would have imperilled its’ ability to receive licences in the US, placing the future of its BetMGM t venture into jeopardy.
Newly appointed CEO David said: “I have been a director of Entain for almost three years and have seen up close the extraordinary hard work that Jette and her team have put in overhauling the culture and practices at Entain.
“I look forward to helping to build on the strong foundations for future commercial success that she leaves behind her.”
Like her predecessor, David is an outsider to the gambling industry, with her previous executive experience being primarily in the alcohol sector, where she led whiskey distillery William Grant & Sons as CEO from 2009 to 2016.
The markets have responded positively to Nygaard-Andersen’s exit, with Entain shares rising 4% from the previous close.
