Codere’s reported €2bn price tag positions the Spanish gaming group as one of Europe’s most significant M&A opportunities this year. That said, industry insiders reckon the business faces an uncertain auction process, with private equity the most likely landing spot.

Spanish business daily Expansión broke news that Codere has been placed on the block at a valuation exceeding €2bn. Sellers are reportedly targeting a deal before the August break. The package includes online operator Codere Online, which operates across Spain and Latin America following its 2021 Nasdaq listing.

Private Equity the Natural Home

Christian Tirabassi, founder and senior partner at M&A advisory Ficom Leisure, frames the transaction as “very much a private equity play”. Mind you, he notes several major operators will conduct due diligence. Lottomatica, DraftKings, and Entain are all expected to examine the opportunity; Codere’s multi-market footprint provides immediate geographical access, after all.

“This is something for the big guys, because it gives access to a number of markets,” Tirabassi explained. He stopped short of identifying a natural strategic acquirer, though. That assessment aligns with H2 Gambling Capital managing director Ed Birkin, who suggested Allwyn International and Flutter Entertainment as potential suitors alongside private equity houses.

The €2bn asking price, however, raises eyebrows.

Tirabassi considers the figure inflated and views its appearance in the Spanish press as deliberate market positioning rather than realistic expectation. “This is PR,” he said. “They clearly leaked the information to start to put the price in the market. I don’t believe it.”

Distressed Ownership Structure

Codere’s ownership by approximately 84 investment funds tells the story of bondholders reluctantly converted into equity holders through restructuring. These creditors never intended to operate a gaming business. Their tenure has shown in underinvestment across the group’s estate.

“The bond holders or the debt holders found themselves in a position to be the owners of Codere without really wanting to be,” Tirabassi explained. “They didn’t really expect to be shareholders of this company. So, probably they have tried a little bit to see what they could do with it. They realised it’s not for them, and they put it for sale.”

The result is what Tirabassi describes as a “fatigued” business lacking strategic direction. “It’s being underinvested, undercapitalised and now they are suffering because of the competition that they have in each market,” he noted. “It’s like everything was frozen five years ago.”

Turnaround Opportunity in Land-Based Assets

Despite operational challenges, Tirabassi sees genuine value creation potential for an acquirer prepared to deploy capital and management resources. Codere maintains positions across multiple verticals outside lottery, with particular strength in Spanish-speaking markets and a solid Italian operation.

The land-based focus, increasingly unfashionable in an industry pivoting digital, actually represents strategic value in Tirabassi’s analysis. Physical estates generate reliable cash flows whilst providing marketing channels insulated from mounting advertising restrictions. “When you have land-based, obviously you’re less worried about any restrictions on advertising, which to me will continue to happen in a number of markets,” he observed.

Thing is, successful omnichannel integration requires operational synergies that Codere currently lacks. That presents both challenge and opportunity for a buyer with the capability to execute that strategy properly.

Online Business Complicates Deal Structure

Codere Online’s involvement adds complexity to any transaction. The digital arm’s separate Nasdaq listing and Codere Group’s majority stake create structural questions around whether the businesses can realistically be separated. Tirabassi considers Codere Online integral to any deal, viewing the combined entity as the only coherent proposition for potential buyers.

Whether the eventual price approaches the reported €2bn figure, or settles considerably lower once due diligence concludes, remains the central question. For distressed fund holders seeking an exit, market positioning through strategic media leaks represents the opening gambit in what promises to be protracted negotiations.

What the team thinks

Baz Hartley says:

Private equity involvement often means an intense focus on operational efficiency and cost optimization, which could translate to tighter bonus terms and reduced player promotions in the short term as new owners look to justify that €2bn valuation. The real test will be whether PE buyers see value in maintaining Codere’s competitive welcome offers and loyalty schemes, or if they’ll follow the familiar playbook of cutting player acquisition costs to boost margins. Spanish punters should keep a close eye on any terms changes in the months following a sale, particularly around wagering requirements and withdrawal limits.