Ladbrokes owner Entain PLC (LSE:ENT) has agreed to sell a 20% stake in its Central European business for £366 million, marking the first step toward a full exit from the region.
The FTSE 100 gambling group currently owns 62.5% of Entain CEE and is selling the stake to joint venture partner EMMA Capital, reducing its holding to 47.5%.
The transaction places an implied value on the Central European business of approximately £1.9 billion, equivalent to around 10 times EBITDA.
That figure stands in stark contrast to Entain’s own group valuation of around 6.3 times forecast 2026 EBITDA, a gap analysts say is difficult to ignore.
Brokers have moved quickly to highlight the discrepancy, arguing that the disposal makes the case for the group’s undervaluation more compelling than ever.
Shore Capital described the transaction as “a clear positive to the investment case given current valuation metrics,” pointing out that stripping out Entain CEE at the implied sale price leaves the rest of the group trading at less than six times EBITDA.
Net proceeds from the disposal will be directed toward debt reduction, with analysts estimating the deal will cut Entain’s leverage ratio by around 20 basis points.
That would bring leverage to below three times EBITDA on a look-through basis, while annual interest savings of around £20 million are expected to leave overall earnings broadly unchanged.
Entain’s management has not provided a specific timetable for a full exit, but has stated it expects to divest its remaining Central European stake in due course.
Future proceeds from any complete exit are expected to be deployed on a dual-track basis, targeting both further debt reduction and the return of excess capital to shareholders.
Shore Capital added that the improving balance sheet strengthens the argument for a share buyback beginning from the end of the 2027 financial year, particularly if the remaining Central European stake is sold.
The disposal represents a meaningful strategic shift for Entain as the group looks to streamline its portfolio and sharpen its focus on its core operations across its broader international markets.