Ladbrokes owner Entain PLC (LSE:ENT) has agreed to sell a 20% stake in its Central European business for £366 million, marking its first concrete step toward a full exit from the region.
The FTSE 100 gambling group currently holds 62.5% of Entain CEE and is offloading the stake to joint venture partner EMMA Capital, cutting its ownership to 47.5%.
The deal places a total valuation on the Central European business of approximately £1.9 billion, equivalent to around 10 times EBITDA.
That figure stands in sharp contrast to Entain’s own group valuation of roughly 6.3 times forecast 2026 EBITDA, immediately drawing attention from analysts tracking the stock.
Brokers have been quick to argue that the transaction exposes the degree to which Entain’s shares trade at a meaningful discount to the underlying value of its assets.
Shore Capital said the transaction was “a clear positive to the investment case given current valuation metrics,” reinforcing the view that the market has persistently underpriced the group.
The broker further noted that stripping out Entain CEE at the implied sale price leaves the remainder of the business trading at less than six times EBITDA, a level analysts consider exceptionally low for a business of its scale.
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 to below three times EBITDA on a look-through basis.
Annual interest savings of around £20 million are expected to leave overall earnings broadly unchanged, providing some cushion as the group repositions its balance sheet following the transaction.
Entain’s management has not provided a specific timetable for a complete Central European exit, though the company said it expects to fully divest from Entain CEE in due course.
Future proceeds from any remaining stake sale are expected to serve a dual purpose, with the company indicating they will be used both to further reduce leverage and return excess capital to shareholders.
Shore Capital said the improving balance sheet strengthened the case for a share buyback program beginning from the end of the 2027 financial year, particularly if Entain completes the sale of its remaining Central European holding.
The progression of this disposal strategy will be closely watched by investors as Entain works to close the gap between its market valuation and the true worth of its underlying businesses.
