DAVY VIEW

Entain has confirmed that it will reduce its holding in its CEE joint venture (JV) from 67.5% to 47.5%, netting a cash inflow of £366m. The disposal values the business at 10x EBITDA and it will use the proceeds to reduce debt. It has also flagged that it is evaluating options to dispose of the remainder of its stake. The initial disposal will be largely EPS and cash flow neutral (on a FY26 pro-forma annualised basis). The reduction in gearing combined with a disposal multiple far in excess of Entain’s group multiple will likely trump any investor concern on reducing exposure to the relatively attractive CEE region. It also reiterated its guidance for FY26 on an underlying basis.