Flutter Entertainment is allegedly inching closer to a deal to acquire Snaitech, the consumer division of Playtech, according to a SkyNews report. The deal would be valued at approximately £2 billion ($2.6 billion).
According to the report, Flutter, which recently shifted its primary stock market listing to New York, could strike a formal agreement with Playtech as soon as Monday. Sources told the publication that the deal would be worth about £2 billion ($2.6 billion), equivalent to roughly the entire market capitalization of Playtech. One insider cautioned SkyNews that an announcement could be delayed until later this week.
Meanwhile, shares in Playtech rose sharply on Monday morning, trading at more than 705p, giving it a market value of just over $2 billion. The development came after Playtech disclosed that it had reached an agreement with Caliente, a Mexican firm, after a long-running dispute over substantial payments to the London-listed company.
The sale of Snaitech, which ranks among Italy’s biggest gambling companies, would leave Playtech as a business-to-business provider of software, and according to analysts, is likely to result in a formal takeover bid in the medium term. This potential sale is also expected to attract interest from other bidders.
Last month, in response to the ongoing speculation, both Flutter and Playtech confirmed the ongoing talks regarding Snaitech. However, both companies had noted there was no guarantee the acquisition would proceed.
For Flutter, the acquisition of Snaitech would be the latest in a series of strategic moves under the leadership of CEO Peter Jackson. The sale of Snaitech would also represent a significant shift for Playtech, which has been the focus of several corporate transactions and takeover attempts in recent years.
Trading as Snai, Snaitech is one of Italy’s largest gambling operators, competing with Flutter’s Sisal brand. Snaitech saw revenues grow by 5% to €946.6 million ($1 billion) in the last financial year and maintained its market-leading position across Italian sports betting brands. Playtech first purchased Snai in March 2018 for €846 million ($941.2 million) after receiving approval from the country’s gambling regulator.