(AsiaGameHub) –   Rumors have been swirling throughout Spain and Latin America ever since news broke last week that Grupo Codere has brought on advisors to oversee a $2.3bn (£1.7bn) sale process.

While the asset is appealing thanks to the company’s presence across markets including Spain, Mexico and Argentina, plus its fast-growing online segment, recent financial struggles and broader global uncertainty have sparked questions over who has the capital on hand to meet the steep asking price.

Codere is currently owned by roughly 84 investment funds, after a 2024 debt-for-equity agreement cut the company’s net debt from €1.4bn (£1.2bn) down to €190m (£165m), and Ted Menmuir, SBC’s Editor-at-Large, suggested the $2bn figure is a way to ‘primarily reward bondholders’.

During an appearance on the iGaming Daily podcast, he said: ‘It seems clear that the narrative being pushed here is that whoever buys this company will secure the second largest gambling brand in Spain with both retail and online operations. They will also gain a foothold in the markets of Mexico, Uruguay, Argentina and Colombia.

‘However, I believe it is important to take Codere’s track record into account. This is a company that carried €2bn of debt for the last decade. It only just recently completed its capital renegotiation with bondholders, which reduced that debt by 95%, so there is still no clear consensus on what Codere has actually proven it can deliver.’

Lucia Gando, Editor of SBC Noticias, pointed to the 2018 purchase of CIRSA by Blackstone, the world’s largest private equity fund, as a template for the path the sale may take.

Blackstone already holds a substantial gambling industry portfolio, and still retains a stake in CIRSA even after the company was listed on the Bolsa Madrid stock exchange in January 2025.

The fund also acquired Crown Resorts in June 2022 and is the primary owner of casino properties in Las Vegas.

Blackstone, or a comparable private equity fund, may view Codere as an attractive investment prospect and have the required capital to complete the purchase at the asking price set out by Codere.

The other leading potential buyers are top multinational gambling groups in the sector, such as Flutter or Entain. However, Menmuir acknowledged that taking a chance on the Spanish and Latin American markets is a ‘risky bet to take on’ given ongoing uncertainty over the future regulatory trajectory of the respective regions.

In Codere Online’s latest financial report, the operator posted year-on-year growth of 6% from €212m to €224m, but tempered any optimism around these results with a warning of higher tax costs in the coming years, with knock-on effects expected to hit Mexico and Colombia in particular.

Meanwhile, similar planned tax increases across markets such as the UK and the Netherlands, alongside broader geopolitical tensions that are weighing on foreign currency values, are placing significant strain on the finances of the entire sector.

For firms like Flutter and Entain, the opportunity to expand across Latin America and Spain is no doubt enticing; however, it remains unclear how much appetite such companies have for pursuing acquisition opportunities right now.

Flutter’s recent M&A activity has focused on geographic expansion and cementing its market leadership, as demonstrated by its €2.3bn acquisition of Snaitech in Italy and its move to take full control of FanDuel – both deals completed in 2024.

A potential deal for Codere would follow a similar formula to the strategy that has worked for Flutter in its recent expansions, as the group may be drawn to the Latin American growth opportunity.

Entain has been far less active on the M&A front, making only low-profile investments in Polish firm STS Holding and US-based Angstrom Sports.

‘If you look at this from a high-level perspective, it is very obvious that you will need some form of private equity fund to step in. On the European side, Lottomatica is a company that has spoken of leading global expansion efforts, but I do not think they will have the appetite to take on a company that carries so many liabilities,’ concluded Menmuir, who added that any deal is likely to have a tiered structure, with stock-based compensation included as part of the payout terms.