Blackstone reportedly considering various options for Spanish gambling firm Cirsa, including an IPO

U.S. buyout firm Blackstone Group is reportedly considering various options, including an initial public offering (IPO), for Spanish gambling company Cirsa, sources familiar with the matter who spoke on the condition of anonymity told Reuters.

The sources revealed that Blackstone has recently reached out to investment banks to solicit proposals for overseeing a potential share sale and the refinancing of Cirsa's debt. It is a common practice for banks managing an IPO to also provide financial assistance in the form of a loan to the concerned company.

Thus far, Blackstone officials declined to comment on the matter, while Cirsa has yet to respond to Reuters' request for a statement.

If the IPO plans materialize, they would follow the recent public share sale of Italian peer Lottomatica, supported by Apollo Global Management, which commenced trading in Milan last  Wednesday.

However, the lackluster performance of Lottomatica's shares on their debut could potentially impact the timing of the Cirsa deal, the people told Reuters.

Despite recent market turmoil, Lottomatica pushed ahead with its listing plans, but its initial public offering was priced at the lower end of the targeted valuation range. Subsequently, the company's shares experienced a decline in the aftermarket.

The sources emphasized that the explorations regarding Cirsa's future are currently in the preliminary stages and may not necessarily lead to an actual transaction.

Cirsa, a renowned Spanish casino operator, reported earnings before interest, tax, depreciation, and amortization (EBITDA) of 552.5 million euros ($609.24 million) for the fiscal year 2022. The company carried a net debt of approximately 2.3 billion euros last year, which equates to four times its EBITDA, based on its most recent annual accounts. Considering the valuation of Lottomatica, Cirsa's overall worth, including its debt, could potentially amount to several billions of euros.

Blackstone initially acquired Cirsa in 2018 for an enterprise value of 2.2 billion euros, according to Refinitiv data. Local media reports in 2021 indicated that an IPO of the group was being explored, but a deal failed to materialize at the time.

As the situation surrounding Cirsa continues to develop, market observers eagerly await further updates and official statements from the involved parties.