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A daily podcast delving into the biggest stories of the day throughout the sports betting and igaming sector.
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in just the space of 12 months with just one year of financial accounts under its belt, it's now gone to private institutions and asked for a sale. Coderas has turned to Jeffries and McQuire to assess sell options for the heritage Spanish gambling group. The board is reportedly seeking a 2 billion euro valuation for the business, pitching Coderas Spain's second largest gambling group and an established retail and online gateway into multiple South American markets for a buyer. Yet the proposed price tag has raised eyebrows, giving Coderas recent financial struggles, which have overshadowed the company since the 2010s. Further scrutiny surrounds the timing of the process. A sale of good areas being explored at one of the most sensitive moments for capital markets, prompting questions over which PLCs or private buyers are in a position to fund the deal for the Spanish giant. Welcome to another episode of iGaming Daily brought to you by OptiMove, the creator of positionless marketing and number one player engagement solution for iGaming and sports betting operators. I'm Fernando Nott. Media Manager for SBC and your host for today where I'm joined by the great Ted Memur, Editor-at-Large for SBC Media. Ted, how are you today? Muy bien, Fernando. Good to be back in London after a very exciting trip to Prague, which I'll be reporting on next week. All right. Yeah, we'll want to read all about it and hear all about it. But first, let's get on with this news. And of course, discuss something that's so deeply related to the Spanish and Latin American markets, editor for SBC Noticias, Lucia Agando is also with us today. Lu, how are you today? Hello, guys. I'm happy to join this episode and talk about Godere, which is one of the biggest uh market leaders in Latin America in general. Yeah, absolutely. Of course, that Maybe a while back people were not so familiar with gambling companies, over the last few years, especially with the online segment booming in Latin America, course, the Takedere brand has become way more popular than it already was, of course, because it was already big. It's just that people maybe didn't know they were playing at a Takedere establishment before. But let's start right at the top. And do you think this is an unexpected move by Coderio to decide to sell these operations? And what is your immediate reaction to these developments? was gonna say ladies first, literally. Okay. Yes, I do view this as a surprise, especially given Coletti's journey back to its kind of recapitalization, how it's handled its relationship with bondholders, and where the company is at the moment. Yes, it's come back from clearing its debts. But if you take a kind of long lens, you could really of build back and see that it's been a chaotic 2020s for this business. It was once the brink of bankruptcy. It's now through negotiations and through a new capital structure back to being stable. However, it's also a surprise just given the general, as you stated in your introduction, the general criteria of global markets at the moment. there is a low, low confidence out there given the wider geopolitical space. And it also raises questions of who has 2 billion euros to fund this deal at this given time. know I don't. What about you, Lu? What are your first thoughts on this decision? Well, I think it came out of nowhere, the news. uh We knew that Godere was struggling, but they were doing better in the past few years. They got to achieve certain financial goals and the operations were well established, at least in Latin America. We also had good results with Godere online. So we were a bit surprised to be honest, but we'll see. It also makes sense, right, to let the company grow on its own and see what happens with this evolution. Yeah, absolutely. I reckon this was a decision that was not taken lightly. They've probably been considering this for a long time. And it's just taking us by surprise because when they announced it, was like first thing for us. But of course, the board has also reportedly set a 2 billion euro target for this cell. So what is this valuation based on in terms of Codere's current position on assets? Looking at the headline 2 billion target that they placed on Codere, to me, 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. And then I think the big picture here is that you get a feasible brand that has secured its space and has heritage carrying into markets of Mexico, Uruguay, Argentina and Colombia. However, I think you have to kind of, again, go back to this. What really stands out about the deal is that, yes, it's what they're pitching, but it's also based on you have to be reflective of its track records. This is a company that was embedded or anchored to 2 billion euro debt over the past 10 years. It only just recently came out of its kind of renegotiation with bondholders who reduced it by 95%. So the jury is very much out on what Kuvete has proven. ah It's a high number to pitch the market for. I believe that the reason why it's set so high is to primarily reward bondholders. to ensure that they actually get something out of this M &A and the M &A closure. I don't think it's dressed very well, but the intentions are quite clear of who this deal is for. No, we also have to take into account that they recently said that they may leave the Colombian market if things don't change tax-wise. And also we know that in Argentina in the recent years, they had too close to lot of retail stores related mostly with mingos. we know they are struggling in this continent, but as said, they also have potential of growth if they do things right. let's see. let's definitely hash the weight and see where this goes. But of course, Ted, you were mentioning the severe financial distress that Koderek went through in 2023, 2024, and before that even more. So how has Codere reshaped its business and its relationship with investors over the past three years? And is it now stable enough to pursue a sale like this? Well, let's go back in 2023 and 2024, essentially, Codere was running on bankruptcy against the walls, against the ropes, however you want to put it. And they had to go through a period of significant renegotiation with its bondholders who had capitalized this company, I think, tracking back to 2007, 2008, where Cordelia initially began its South American expansion. brought into a very good, know, via debt, it acquired a lot of kind of premises in the markets of Argentina, Mexico, and Colombia. And where it has kind of struggled is essentially what you've seen in what Codere can tell you is that the one element that's increased since its online engagement by Codere Online, that was a unit that was separated. Its retail performance has been stagnant in Spain and its South American gaming units have gone through a period of significant fluctuation given the market conditions and also in light of each kind of peso dropping against its Euro value, that's impacted the way kind of the corporation has paid its long-standing debts. It came to a point of inflation in 2024 where the bondholders agreed to reduce it by 95%. It's given this clean slate to operate off. I think what is surprising the market is that in just the space of 12 months, with just one year of financial accounts under its belt, it's now gone to private institutions and asked for a sale. And I want to go back to the price tag there, the 2 billion euros that they have set for valuation of Kodairi. is this a figure that is primarily about rewarding the Codere's long-term bondholders or can it be justified on the basis of the business valuation, the growth potential of Codere uh in all these markets that they are working on? oh I think it's a mix. uh The bondholders became shareholders, so they want a return. But also the business is performing well, as Ted mentioned. Revenue is in in 2024 were 1.3 billion and they have room to grow, especially in online betting and now that the World Cup is coming and they are very popular here in Latin America. So the price is ambitious, but it may be something that they can get. Does Skoderi actually have a compelling equity story to sell to the market? Or is this more of a case of the shareholders trying to maximize value at the right moment? Look, I think like in every field there is an equity story and you have to tell something to market. look, know, we've all bought and we've all sold something in our lives. And I think like Coletti is saying, look, if you want an instant access point into South America and you want to trust it. brand, the Spanish markets, we're it. And we place that value at 2 billion. The more difficult side of this arrangement is just the timing and who's got confidence to do this sort of deal. There's going to be a lot of explaining to do for whichever buyer they get. Yes, definitely. This is something to be looking out for, but we will continue discussing who is going to be em buying Codere, of course. We might or might not have the answer for that yet. But you'll have to stick around uh before, but until after we do this very quick ad break and we will be right back to covering this Codere sale story. And we're back with more iGaming Daily to continue discussing this Codere sale story. uh Two billion valuation. It's seeking the Spanish giant for uh for the business and let's get into the deal dynamics. We were talking a lot about who is going to buy this. Of course, a $2 billion sale for such bolemical business feels ambitious in the current financial climate we are in right now. So how realistic is it that Koderi can sell their business for $2 billion? Well, it's something for the prediction markets, right? Yeah, for sure. there's a lot of big operators in the world interested in Spain and Latin America. So realistic maybe, but I don't think it will be easy. Except that we got surprised by one of these big operators that are Currently leading the Latin American market. thinking about Betzone or Bedwarrior or Sears even the biggest competitor in Spain. But we know that the gaming sector faces a lot of scrutiny, especially in this new market. So we'll have to see who's able to... to face all these challenges and of course, half 2 billion euros to make this achievable. That to me is the nail on my head. And I think you also got to separate the conditions out. Look, it's a bad market out there on a global perspective, but there's kind of individual nuances. Look at uh the exposure to Spanish kind of increasing retail prices that Covete has. And also, again, we've seen kind of severe kind of fluctuations across, you know, not only South American currencies, but every currency due to kind of an ongoing crisis and the crisis of confidence in the general market ahead of kind of, you know, very visible global headwinds. There will be, you know, these nuances that catch on to that in America. And again, this is referring back to that kind of two billion price tag. Who's going to show their hand and say, look, we are confident that we can see this Coderre deal through. It's up in the air. of course, we're talking global markets. We're talking Spain. We're talking Latin America. So what would exactly a buyer would be buying uh with or acquiring when buying Coderre is what is the true growth of oh the true growth engine that drives Coderre today. This is where it gets interesting. yes, Godere in 2022, it's spun out Godere online, which was pretty much its only unit that was actually catching any growth. And its latest results for 2025, its accounts, showed a net gaming revenues of 225 million euros, but it's a beta is still, you know, compared to to European competitors compared to other competitors, it's a beta that remains at 13 uh million euros. So it's a heavy price to put on just Cordelia online to say, look, this is the growth engine of the deal. The other kind of factor to take on board here is how much exposure Cordelia has in terms of its retail channel and its land-based channel. Whoever buys this would have to kind of spin a lot of units. I don't necessarily think that the proposition they're putting in two billion to acquire Cordelia will necessarily be kind of cash focused. I think they'll have to be kind of much more kind of stock compensations on the rewards. And there have to be a lot of kind of tiered, a uh very high kind of tiered structure to how the deal is compensated. And of course, I think that Coderre Online has a lot of room for growth, but it has been kind of narrowing down its oh operations or its efforts over the last few years. We've talked with CEO Aviv Scher uh quite a few times over the last few months, and he has been very insistent in the fact that Coderre Online is focusing on their core markets, Spain, Mexico. and where they are already working within Latin America, for example, Argentina and the city of Buenos Aires. So I think there is room for growth for sure. And I do think that there's an opportunity em when acquiring Coderre through Coderre online. And of course, the land-based business is also very big. But there is still a lot of work to do and we'll have to see who wants to embark on such a venture and decide, okay, I'm going to take Kodaria online to the next m level, eh or if they just want to take advantage of the business as it is, which I don't think any businessman or woman wants to do that. They always want more. So who do we see as those business people ready to invest? and bid for a company like this. Lu, already mentioned Betzon, you already mentioned a few other companies. So which names could realistically enter the bullring in this M &A process? Well, oh we know that Circe was also saved by Blackstone. So I think one uh big financial uh group like that could be one of the names that we'll see entering in this deal or at least negotiation. But we sell like Betzone, Flutter, maybe Entain, I don't know, like a huge merger, MIA, or maybe some financial groups investing altogether in this business. I think it's more probable to find different financial groups investing. altogether than just one company buying the whole operation. Yes, it's definitely going to need someone with a very deep pocket and a very big wallet. Ted, what do you think? Yeah, I agree. I think that if you look at this from the top down, it screams that you would need some form of private equity fund coming in. The other factor here is I think, as we mentioned before, is that the ownership of Colere is divided by four. We've got bondholders and stretchers 85 invest this. So it's very deep. There's lots of people to have to be satisfied for this deal to go through. I mean, looking at it from a kind of a European level, a company that's talked of taking or leading kind of global expansion is a lot of Matica, but I don't think that they'll have a stomach to take a company which carries so many liabilities as as code. I think it would look for a kind of more conservative buy to enter markets and also Again, heading back, yes, Spain and South America, there's opportunities there, but there's opportunities in a very fluctuating market. It's a risky, risky bet to take on. And being that risky, how confident are you that Coderre can secure this sale and more importantly, achieve anything near or close to its target price? When a wise man once said, hashtag wait and see. I think it's a coin toss. ah And I think actually the elements for this deal are not necessarily so much fixated on gambling. I think they're much more fixated on global market conditions. What is going to be the premium on available cash? who can kind of leverage it and who can get access to it, considering all these kinds of global dynamics playing out. You have to be a very, very confident buyer to take on this kind of deal. For sure. And will the sale of Coderio prove transformative for its whole market of Spain and for the wire gambling landscape in Latin America? I think it will be a big deal. Godere is right now the major player in both Spain and Latin America. So I think we will be impacted by this change of operations. So we'll see, but oh it may be good for new stuff coming up here. Yeah, there's definitely a lot going on in Latin America, especially tax wise and regulation wise. Governments deciding to regulate and going back and say, hey, I don't like this regulation. But what you're talking about, you signed it yourself and all that stuff. All those shenanigans happen in Latin America. We'll have to hashtag wait and see what company is willing to take the risk. What company is willing to embark on a risky decision to acquire Coderre, whether it's for two billion euros or less. We'll have to hashtag wait and see. But that has been all for today. We will continue to monitor this news very closely because of course this decision to sell one of the biggest companies in Spain and Latin America is going to bring some more information ahead. So make sure you are subscribed to all SVC media and newsletters, especially SVC Noticias and SVC News, of course. and also for iGamingDaily on social media and your preferred podcasting platform. That's been all for today. Thank you very much, Lucia Gando, Ted Memier. Thank you very much, Ania McDonald for producing this episode. I'm Fernando Nott and to our listeners out there, we'll see you in the next one. Goodbye.