Entain agrees to buy Croatia’s biggest bookmaker for €600m
Entain has revealed a new venture and the acquisition of a major bookmaker as part of plans to expand its presence across continental Europe.
The Ladbrokes and Coral owner has teamed up with Czech investment firm EMMA Capital to create Entain CEE, of which London-listed Entain will own a 75 per cent stake, in order to tap into the Central and Eastern European gambling market.
In addition, the company will pay EMMA €600million (£507million) to obtain a majority stake in Zagreb-based SuperSport, whose share of of Croatia’s betting and gaming market exceeds more than 50 per cent.
Expansion: Ladbrokes owner Entain has teamed up with Czech investment firm EMMA Capital to create Entain CEE to tap into the Central and Eastern European gambling market
It could pay the group around €90million more in cash during early 2023, dependent on SuperSport’s underlying earnings in the current financial year.
Financing for the takeover will come from a €700million bridge loan supplied by numerous banks, including Santander, NatWest and Lloyds Banking Group.
Entain’s latest acquisition is the sixth to have been either completed or agreed upon this year, following the takeovers of Latvian firm Klondaika and Polish sports betting provider Totolotek.
And two months ago, the group, whose brands also include Bwin, FoxyBingo, and GalaBingo, agreed to buy Dutch rival BetCity for a potential £729million.
Alongside this, Entain declared first-half results showing net gaming revenues rose by 19 per cent to £2.1billion thanks to an exceptionally strong recovery at retail outlets.
Net gaming revenues in the group’s stores skyrocketed by 244 per cent on a like-for-like basis, with trade in the UK and Italy surpassing pre-pandemic levels.
Internet growth: Entain’s total digital gaming revenues declined after expanding by double-digit percentage levels for 23 consecutive quarters until the end of 2021
Meanwhile, its US-based BetMGM joint venture continued to go from strength to strength, boosting gaming revenues by two-thirds from the previous year as it launched in four more US states and territories.
This still failed to prevent Entain’s total digital gaming revenues from declining after expanding by double-digit percentage levels for 23 consecutive quarters until the end of 2021.
Online gambling brands benefited heavily during lockdown periods as punters worldwide were banned from placing bets at their local bookmakers, before they began to soften as restrictions were loosened.
But it has also been affected this year by weaker than forecast growth in Brazil, stricter affordability measures in the UK, and a worsening cost-of-living crisis.
‘The current economic pressures, increasing rates of inflation and increasing energy costs are a cause for concern for many consumers,’ Entain told investors.
‘Whilst the group considers itself as relatively resilient to the impacts of economic pressures, it is not immune. The directors continue to be vigilant of the economic backdrop.’
Last month, the business warned that it expects internet-based revenue to flatline this year, given the weaker economic outlook.
Julie Palmer, a partner at Begbies Traynor, said the company is ‘facing a testing future as economic storm clouds darken and many punters decide that having food on the table trumps having a flutter.
‘Despite Entain’s spread of operations around the world – which would normally protect it from downturns in individual markets –concerns about the global economy’s health means that the issues it, and the entire gambling industry, face are international.’
She added: ‘With consumers facing wallet-busting bills, even the most enthusiastic gamblers are starting to take stock and weigh up the odds of whether they can afford such a high-stakes hobby.’
Entain shares were the FTSE 100 Index’s best performer on Thursday, rising by 3.9 per cent to 1,357.5p, although their value has fallen by a third in the past 12 months.
