The rumour mill has been churning across Spain and Latin America ever since reports emerged last week that Grupo Codere has hired advisors to lead a $2.3bn (£1.7bn) sale.
Although alluring given the company’s footprint across markets such as Spain, Mexico and Argentina, alongside a surging online division, recent financial troubles and wider global uncertainty have raised questions of who has the available funds to meet the hefty valuation.
Codere is owned by approximately 84 investment funds following a 2024 debt-for-equity deal that reduced the company’s net debt from €1.4bn (£1.2bn) to €190m (£165m), and Ted Menmuir, SBC’s Editor-at-Large, suggested the $2bn figure is a way to ‘primarily reward bondholders’.
Speaking on the iGaming Daily podcast, he said: “It seems that the spin here is clearly that whoever buys this company is securing the second largest gambling brand in Spain with a retail and online presence. They will have also secured [a presence] in the markets of Mexico, Uruguay, Argentina and Colombia.
“However, I think you have to be reflective of Codere’s track record. This is a company that was anchored to €2bn of debt over the last ten years. It only just recently came out of its capital renegotiation with bondholders, which reduced it by 95%, so the jury is very much out on what Codere has proven.”
Lucia Gando, Editor of SBC Noticias, pointed to the 2018 purchase of CIRSA by Blackstone, the world’s largest private equity fund, as an example of the avenue that may be taken.
Blackstone already has a significant gambling portfolio, and still holds a stake in CIRSA even after the company was floated on the Bolsa Madrid stock exchange in January 2025.
The fund also acquired Crown Resorts in June 2022 and is the major owner of casino properties in Las Vegas.
Blackstone, or a similar private equity fund, may see Codere as an attractive investment opportunity and have the required funds to make the purchase at the asking price set out by Codere.
The other leading candidate is one of the industry’s leading multinational gambling groups, such as Flutter or Entain. However, Menmuir admitted that taking a punt on the Spanish and Latin American markets is a ‘risky bet to take on’ given ongoing uncertainty over the future regulatory roadmap of the respective regions.
In Codere Online’s latest financial report, the operator reported year-on-year growth of 6% from €212m to €224m, but caveated any optimism drawn from these results with a warning of a heavier tax bill in the coming years, with the knock-on effects expected in Mexico and Colombia, in particular.
Meanwhile, similar planned tax hikes across markets such as the UK and the Netherlands, alongside wider geopolitical tensions that are impacting the value of foreign currencies, are placing significant strains on the finances of the whole sector.
For the likes of Flutter and Entain, the opportunity to expand across Latin America and Spain is no doubt enticing; however, it is unclear the appetite such firms have for pursuing acquisition opportunities.
Flutter’s recent M&A activity has been focused on geographic expansion and consolidating marketing leadership, evidenced by the €2.3bn acquisition of Snaitech in Italy and the move to take full control of FanDuel – both taking place in 2024.
A potential deal for Codere would be a similar formula to that which has worked for Flutter in recent expansions, as the group could be alerted by a Latin American opportunity.
Entain has been less active, with low-key investments in the Polish firm STS Holding and Angstrom Sports in the US.
“If you look at this from the top down, it screams that you would need some form of private equity fund coming in. From a European level, a company that’s talked of leading global expansion is Lottomatica, but I don’t think that they’ll have a stomach to take a company which carries so many liabilities,” concluded Menmuir, who added that any deal is likely to have a tiered structure, with stock compensations on rewards.
