Kenneth Alexander and Lee Feldman, the former leadership duo of GVC Holdings have launched investment vehicle FS Gaming, acquiring a 6.5% stake in embattled 888 Holdings
FS Gaming is reported to be comprised of seasoned igaming investors who believe that 888’s is ‘significantly undervalued’ and will help the LSE gambling group overcome its hurdles since acquiring William Hill’s UK and European businesses.
A corporate filing revealed that Alexander and Feldman, the respective former CEO and Chairman of GVC Holdings (formerly Entain Plc), are joined by ex-Betfair executive Stephen Morana and igaming investor Daniel Shribman.
Helping the group acquire its 6.5% stake in 888, an RNS filing disclosed that DAZN CEO Shay Segev had allowed his 2% stake in the company to be controlled by FS Gaming.
2022 was a dire year for 888 as it grappled with compliance failures and executive shake-ups which saw the company freeze £50m worth of customer accounts for non-compliance with money-laundering rules, leading to the abrupt exit of its Group CEO Itai Pazner.
An insider close to the investment group said: “In the long term, 888 could be a target for a partial sale or a takeover by another betting group or private equity. It’s a really quality, undervalued asset with top-quality brands and top-quality people in the business.”
Short-term initiatives will see the group work with 888 Chairman Lord Mendelsohn to find a new CEO, and offer strategic guidance to drive down operational costs as 2022 saw 888’s long-term debt stand at £1.72bn.
The investment marks the return of Alexander and Feldman to the gambling M&A space, as both executives had left the industry in 2020, as GVC completed its £4bn acquisition of Ladbrokes Coral to become an FTSE100 business.
The news of this investment has brought a spark of optimism, with an 888 stating: “We welcome the investment of FS Gaming, which we believe reflects the significant value creation potential in our business.
“The company remains highly confident in its long-term strategy to maximise value for shareholders.”