A Cirsa casino in Valencia. JUAN CARLOS CARDENAS (EFE)
Blackstone tests the market’s appetite to reactivate Cirsa’s IPO after the summer. In recent weeks, the company and its main shareholder have held a round of meetings with the main investment banks that operate in Spain with the aim of promoting the sale of the firm again, either with a listing on the stock market or with an operation after the puncture of the operation last year, according to financial sources. In any case, the gambling group’s appraisals exceed 3,000 million.
It was in April 2018 when Blackstone won the bid for Cirsa and acquired the gambling group from Manuel Lago for 1,600 million. Five years later, the period of time for private equity funds to divest from their investees and collect capital gains is more than enough. During this time, Blackstone has boosted the growth of Cirsa with acquisitions, such as those of Giga Games, Sportium or the Mexican firm Ganabet and the Italian EPlay24. The group reached its record for revenue and profit in 2022. He earned 56 million and entered 1,741.2 million, 56% more than in 2021 and 8% above the pre-Covid figures.
The venture capital fund already tried to sell Cirsa last year, for which it hired Lazard as financial adviser. But the outbreak of the war in Ukraine completely shut down the financial markets and forced the cancellation of Cirsa’s divestment.
Now, with the good numbers in hand for 2022, it seems time to rethink a transaction. Already an Italian gaming company, Lottomatica, tested the markets during this month of May with a debut on the Stock Market that valued the group at more than 2,000 million. However, the operation has not been exactly successful. Apollo, its shareholder, managed to raise 600 million with a mix of capital increase and secondary placement of shares, to list 31% of the group. It fell more than 5.6% in its first crossing and its titles yielded 13% with respect to the price of the debut.
Even so, Blackstone wants to take advantage of the path that Apollo and Lottomatica have already opened to explore an IPO. The management team and the company have held a round of meetings with the main investment banks operating in Spain in recent weeks. The objective is to test the pulse and appetite of the market to explore an IPO, which will arrive after the summer. Some sources suggest that the complicated market situation – without going public for a year – will delay a possible transaction until 2024. Sources from Cirsa and Blackstone have declined to comment.
The idea of both the firm and the shareholder and banks consulted is, in fact, not to close doors. And analyze, together with the IPO, a possible sale. It is common for investment banks to work on possible IPOs as a competition between a market debut and a private sale, to end up choosing the one that offers the greatest return to its shareholders. This is what is known in the market as dual track.
The first appraisals of the gambling group exceed 3,000 million euros. The high amount and the reluctance of the funds to invest in gaming companies, due to the socially responsible investment criteria of their own investors, complicate the sale to the all-powerful venture capital funds. Therefore, the only alternative that is really open to the Stock Market is the merger of Cirsa with some other gambling group worldwide.
At the moment, Blackstone is counting on Lazard as lead advisor to analyze these alternatives. His job now is to elect a syndicate of underwriting banks to secure a potential IPO. Deutsche Bank and Barclays, with which the group has already worked on various bond issues, are the best placed.
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