Investors in Grupo Codere are reportedly evaluating the possibility of selling the Spanish gambling group through separate transactions for its main business divisions, following a lack of substantial interest in a full acquisition since the company was put up for sale in March.
Alternative Sale Strategies on the Table
Codere’s ownership, largely comprised of bondholders who took control after a series of financial restructurings, is now considering break-up options. The company’s three core segments—European operations in Spain and Italy, Latin American activities across several countries, and the separately listed Codere Online—may be sold independently to attract a broader range of buyers.
Reports indicate that some potential buyers have raised concerns about specific markets, notably Argentina and Mexico. Issues such as economic volatility in Argentina and recent tax hikes in Mexico are seen as complicating factors for those considering a purchase of the entire group.
Market Context and Competitive Landscape
In Europe, Codere faces a shifting landscape as its competitor CIRSA is set to merge with Lottomatica, creating a major European gambling entity. This development could influence the attractiveness of Codere’s European assets for prospective buyers, given the increased competition and consolidation in the market.
Financial Performance and Ownership Structure
Codere has shown signs of recovery under CEO Gonzaga Higuero, with reported revenue of €1.45bn and a 26% rise in adjusted EBITDA, according to figures cited in the Spanish press. The company’s Latin American operations continue to be its main source of revenue and earnings. Ownership is now distributed across approximately 56 investment funds, with Davidson Kempner holding the largest stake.
Implications for Industry Stakeholders
The potential for Codere to be sold in parts rather than as a whole could reshape the competitive landscape in both the European and Latin American gambling sectors. Operators and affiliates may see new entrants or changes in market share, depending on who acquires the various divisions. Suppliers and regulators will need to monitor these developments, as changes in ownership could impact licensing, compliance requirements, and partnership opportunities.
Key takeaways
- Codere investors are considering selling the group in separate divisions due to limited full-sale interest.
- Concerns about Argentina's economy and Mexico's tax changes are influencing buyer decisions.
- Codere’s recent financial improvements may affect its valuation and sale prospects.
- Potential break-up could alter competitive dynamics in key gambling markets.