Paddy Power owner Flutter Entertainment is close to buying Italy’s Snaitech for a possible €2.3 billion, although both parties caution that a deal is no certainty.
Flutter reported on Tuesday that profits in the three months to June 30th quadrupled on the same period last year to €270 million.
Just one day later, London-listed Playtech confirmed it was in talks to sell its Italian betting business, Snaitech to the Dublin-based bookmaker and casino group.
Playtech said it had given the Irish group a “period of exclusivity” to scrutinise Snaitech’s books and finalise transaction documents. However, both parties cautioned separately that there could be “no certainty” that a deal would result, or what the terms of that transaction may be.
“Further announcements will be made as and when appropriate,” Playtech’s statement said.
The British group noted that reports valued a likely deal for Snaitech at “about” €2.3 billion. New York-listed Flutter confirmed the talks adding that it would “provide an update as appropriate”.
Snaitech is Italy’s biggest online betting business, offering sports betting, and casino and slot machine games to customers. More than two million people a day bet with it online, according to its website.
It also owns more than 1,600 betting shops in Italy, and two racetracks, including San Siro in Milan, as well as a horse racing broadcasting business, Epiqa, and Happybet, which has outlets in Austria and Germany.
Its owner, multinational Playtech, develops systems for online betting. Its partners include Flutter group companies, Paddy Power, Betfair and US subsidiary Fanduel, along with several of the Irish giant’s rivals. It has operations in Europe, the Middle East and the US.
Following confirmation of the talks, Playtech’s shares surged on the London market. They had risen over 14 per cent to 614 pence sterling by the close of business on Wednesday.
Flutter’s shares soared on the New York market after trading opened there on Wednesday, largely on the back of its latest financial results. The group’s stock rose more than 12 per cent to $214.80 at 9:35am local time, or 1:35pm Irish time. Having come back somewhat on those gains, it was trading more than 8 per cent higher at $207.28 shortly before 5pm Irish time, 1pm in New York.
The Irish group moved its primary listing to the New York market in May, and shifted its headquarters there.
Its Clonskeagh, Dublin office remains one of its key bases, while the company is incorporated in the Republic and is tax domiciled here.
However, the US is the group’s biggest and fastest growing division. Flutter expects full year revenue there to top $6 billion (€5.45 billion).
Flutter was one of the first European players to move into the US after the supreme court struck down laws barring individual states from legalising sports betting. Since then 38 states have legalised the practice, with 30 of them allowing it online.
Flutter subsidiary Fanduel is the market leader. It earned revenues of $1.5 billion in the three months to the end of June, the group said this week.
Flutter also owns betting exchange Betfair, bookie Sky Bet, Poker Stars and Sports Bet in Australia. It has a presence in more than 80 countries.
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