Flutter in talks to buy Playtech’s Italian operations for £2bn

Flutter Entertainment is speeding up the pace of acquisitions after entering talks over a potential £2 billion purchase of Playtech’s Italian operations.

It emerged this week that the Paddy Power and Betfair owner had kicked off discussions over an estimated £1 billion takeover of Betnacional, Brazil’s fifth-biggest gambling operator.

In recent weeks Flutter has also been tipped to team up with Boyd Gaming in a potential $9 billion bid for Penn Entertainment, a US rival, amid criticism from an activist investor over Penn’s “misguided interactive strategy”.

Analysts suggested that Flutter, which owns the leading US betting group Fanduel, was taking advantage of its increased firepower following its recent decision to shift its primary stock market listing from London to New York, where it has already moved its operational headquarters.

Peter Jackson, 48, Flutter chief executive, said recently that the group had a strong balance sheet, which gave it the ability to pursue further deals or to return cash to shareholders.

The latest deal, confirmed on Wednesday morning in a stock exchange statement, would see Flutter swallowing Snaitech, the consumer arm of Playtech, in an estimated £2 billion deal.

Playtech said it had noted media speculation over its talks with Flutter regarding “the potential sale of the Snaitech business for a value that could be about £2 billion”. It confirmed that it had granted Flutter a period of exclusivity to complete due diligence and finalise the necessary transaction documentation.

It added, however: “There can be no certainty that any transaction regarding the potential sale of the Snaitech business will ultimately be agreed, or as to its terms.”

Although Snaitech has long been mooted as a likely candidate for disposal, sources close to Playtech insisted it had never been formally placed on the market and it was only the scale of the deal — which is greater than Playtech’s market value — that had persuaded it to play ball.

It was suggested on Wednesday morning that Playtech, once it had sold Snaitech, could itself become a target, although its past experiences could militate against that. Two years ago, after entertaining a number of approaches, Playtech ended up taking itself off the market after failing to get a deal over the line.

It was Playtech’s failure to sign a deal that sparked the first serious suggestions that it should consider selling Snaitech. At that point, the mooted valuation was £1.8 billion, still well ahead of the £730 million Playtech had originally paid for the Italian business six years ago.

Playtech was founded in 1999 by Teddy Sagi, an Israeli tech and property billionaire. It supplies software and games to gambling operators and employs 7,700 staff across 19 countries.

Flutter operates a wide range of online sports betting and iGaming brands including Fanduel, Sky Betting & Gaming, Sportsbet, PokerStars, Paddy Power, Sisal, Tombola, Betfair, MaxBet, Junglee Games and Adjarabet.

Flutter reported strong second-quarter results on Tuesday night and its shares were trading 8 per cent, or $15.21 higher, at $206.60 in New York by early Wednesday afternoon.

Playtech shares jumped 13.8 per cent, or 74p, to close at 612p in London on Wednesday.