Paddy Power and Betfair owner Flutter in talks over £2bn Snaitech deal

Wednesday, August 14, 2024 10:17 AM
| Updated:

Wednesday, August 14, 2024 10:22 AM

Paddy Power and Betfair owner Flutter Entertainment are reportedly in talks to buy Italian gambling company Snaitech, the consumer division of Playtech, in a deal that could be worth around £2bn.

Sky News reports that a formal agreement is not expected until next month, but the details of the negotiations are so important that Playtech may be required to disclose them publicly.

However, both Flutter and Playtech have declined to comment on the potential deal for now.

If the acquisition is completed, Snaitech would be valued at a premium to Playtech’s current market capitalization. Playtech, a London-listed company, also operates a significant business-to-business gaming technology division.

In May, Flutter moved its primary offering to the New York Stock Exchange, although its shares continue to trade on the main market of the London Stock Exchange as a secondary offering. The shares are up 15 percent year-to-date in London.

The firm has previously described Wall Street as its “natural home” because of its focus on capitalizing on the liberalization of U.S. gambling laws, a key growth area for the firm.

The potential Snaitech deal follows a series of international acquisitions by Flutter, including the purchase of Milan-based Sisal from CVC Capital Partners for £1.62 billion in December 2021.

This acquisition strengthens Flutter’s presence in Italy, where it already operates through its PokerStars and Betfair brands. It is still unclear whether Snaitech will be integrated with Sisal.

Flutter recently acquired an initial 51% stake in Serbian gaming operator MaxBet Kladionica as part of its strategy to expand its commercial presence in the Balkans.

This comes after Flutter forecast a 20 per cent year-on-year increase in group revenue and a 34 per cent increase in adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) by the end of 2024.

Flutter raised its forecasts on Wednesday after announcing a 20 per cent increase in group revenue to $3.6bn (£2.8bn) for the three months ending June 30, 2024, compared with $3bn (£2.3bn) in the same period in 2023.

Flutter shares were up more than eight percent in morning trading.