Entain’s battle with BetCity former shareholders – lawsuit follows acquisition

Lea Hogg 4 months ago
Entain’s battle with BetCity former shareholders – lawsuit follows acquisition

In December, Entain’s Netherlands subsidiary filed a suit in the UK’s Commercial Court against a number of former shareholders of BetCity. The case number is CL-2023-000850 (photo above) – Entain Holdings (Netherlands) B.V. v. Sports Entertainment Media B.V. and others.

These include several members of the Singels family, who owned a majority stake in the business prior to the acquisition by Entain.

The news was first published by Dutch gambling trade media Casino Nieuws.

Entain has filed a Part 7 Claim – General commercial contracts and arrangements, which generally refers to matters of contract law.

While details of the claim are not publicly available, the legal entity that formerly owned the operator, Sports Entertainment Media B.V, is named as a defendant in the suit.

Other defendants include previous CEO Melvin Bostelaar, the former marketing director Robert Kooiman, as well as seven members of the Singels family.

Bostelaar exited his role in June 2023 for personal reasons and was replace by PartyPoker veteran Vic Walla. .Entain has engaged the Clifford Chance law firm to prosecute the case and advise over the acquisition of the Dutch gambling business, while all the defendants are represented by London outfit Sidley Austin LLC.

Entain completed acquisition in January 2023

Entain announced in June 2022 that it would be acquiring BetCity for an initial consideration of €300 million, rising to €450 million depending on the outcome of certain performance targets.

The deal – which closed in January 2023 – was expected to generate €28 million in synergies by 2026.

BetCity was among the first companies to receive a licence following the launch of the regulated Dutch online gambling market, which began in October 2021.

At the time of the acquisition, BetCity had attained an overall market share of 20 percent according to data provided by the country’s gambling regulator. At the time Entain agreed to provide customers with more engaging products, content and experiences and to expand its presence in further regulated markets.

Recently, many of Entain’s acquisitions under former CEO Jette Nygaard-Andersen have been drawn into question, with investors criticising questionable returns because of a downturn in share price. The deal was expected to generated £28 million of cost synergies by the end of 2026. The initial payment was funded by the Group’s re-financing and cash resources.

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