Codere launches potential €2bn sale led by Jefferies and Macquarie

Codere has formally initiated preparations for a potential sale, marking a significant development in the European gaming sector. The company has appointed Jefferies and Macquarie Capital to oversee the process, signaling a structured and deliberate approach to exploring a transaction.

Early market discussions indicate that the business could attract a valuation exceeding €2 billion. This expectation reflects a notable turnaround in Codere’s financial position following a comprehensive restructuring that reshaped its ownership and strengthened its balance sheet.

The decision to pursue a sale comes at a time when the company appears to have achieved greater financial stability, which may enhance its appeal to both strategic and financial investors.

Sale process begins to take shape

According to reports from Spanish financial media, Codere has entered the early stages of a formal sale process. The appointment of Jefferies and Macquarie Capital is widely interpreted as a clear indication that the company is not merely conducting a preliminary review but is actively preparing for a transaction.

Market participants suggest that interested parties could be invited to submit non-binding offers as early as mid-May. This would be followed by a more formal bidding phase expected to commence in early July. Codere is reportedly aiming to conclude a deal before the end of August, pointing to a relatively compressed timeline.

Such a schedule implies that substantial preparatory work has already been completed behind the scenes. Advisors are likely coordinating due diligence materials, financial disclosures and strategic positioning to ensure a smooth and efficient process.

While timelines in corporate transactions can shift depending on market conditions and buyer interest, the current plan suggests a clear intent to move forward at pace.

Ownership structure reshaped after restructuring

The potential sale follows a significant financial restructuring completed in October 2024, which fundamentally altered Codere’s ownership structure.

As part of the process, control of the company transitioned largely to its creditors. Approximately 84 investment funds now hold stakes in the business, reflecting a highly diversified ownership base.

Bondholders control around 95 percent of Codere New Topco S.A., the entity that assumed operational control following the restructuring. Meanwhile, Codere S.A. retains a minority stake of approximately 5 percent, along with warrants issued under the restructuring agreement.

The restructuring included a €225 million capital injection provided by creditors. In addition, more than €350 million of senior bond debt was converted into equity. This conversion significantly reduced the company’s leverage and aligned creditor interests with long-term performance.

Debt maturities were also extended to September 2026 and November 2027, providing the company with additional financial flexibility and reducing near-term refinancing risks.

This transformation has positioned Codere as a more stable and potentially attractive asset in the gaming sector.

Financial performance shows signs of recovery

Codere’s improved financial profile is a central factor underpinning the potential sale.

Prior to restructuring, the company faced considerable financial pressure, including a high debt burden and liquidity constraints. However, the measures implemented in 2024 have led to a substantial improvement in its balance sheet.

Gross debt has been reduced dramatically from approximately €1.4 billion to around €190 million. At the same time, liquidity has improved by roughly €60 million, enhancing the company’s ability to support operations and strategic initiatives.

Operationally, Codere has maintained a significant market presence. The company reported revenue of €1.34 billion for the 2024 financial year, alongside adjusted EBITDA of €179 million.

More recent internal estimates suggest that EBITDA has exceeded €200 million, indicating continued stability and potentially modest growth following the restructuring.

These figures are likely to play a key role in discussions with prospective buyers, as they demonstrate both resilience and the potential for future profitability.

Strategic rationale for a sale

The decision to explore a sale appears to be closely linked to the interests of Codere’s current ownership base.

With creditors now holding the majority of equity, there is a natural incentive to realise value through a strategic transaction. A sale could provide an opportunity to crystallise gains following the restructuring and return capital to investors.

From a strategic perspective, Codere’s footprint in regulated gaming markets, combined with its improved financial position, may appeal to industry operators seeking expansion or consolidation opportunities.

At the same time, financial investors could view the company as a turnaround success story with further upside potential.

The involvement of experienced advisors such as Jefferies and Macquarie Capital is expected to support the positioning of the business and facilitate engagement with a targeted group of potential buyers.

Limited pool of potential buyers

Despite the positive momentum, the pool of potential acquirers is expected to remain relatively محدود.

Large gaming assets often face heightened scrutiny from certain institutional investors, particularly in relation to environmental, social and governance considerations. As a result, some private equity firms may be constrained in their ability to participate in such transactions.

This dynamic may narrow the field to a select group of strategic operators and specialised investment funds with experience in the gaming sector.

In addition, valuation expectations could influence the level of interest. A reported valuation above €2 billion would require buyers to have both the financial capacity and a strong strategic rationale for the acquisition.

The success of the sale process will therefore depend not only on Codere’s improved financial metrics but also on broader market conditions and investor appetite.

Outlook for the transaction

As the process moves forward, several factors will be critical in determining its outcome.

First, the level of engagement from potential bidders will provide an early indication of market interest. Strong participation in the initial non-binding offer phase could support competitive tension and potentially drive valuation.

Second, due diligence findings will play an important role in shaping final bids. Buyers will closely examine operational performance, regulatory exposure and growth prospects across Codere’s markets.

Finally, macroeconomic conditions and capital market dynamics may influence both timing and pricing. Stability in these areas could support a smoother transaction process.

While uncertainties remain, the groundwork laid by the recent restructuring has placed Codere in a more favourable position than in previous years.

Conclusion

Codere’s move to explore a potential sale represents a pivotal moment in the company’s recent history. Following a comprehensive restructuring that reduced debt, strengthened liquidity and reshaped ownership, the business now appears better positioned to attract investor interest.

The appointment of Jefferies and Macquarie Capital underscores a clear commitment to a structured and timely process. With a target valuation reportedly exceeding €2 billion, the company is entering the market with renewed confidence in its financial stability and operational resilience.

However, the path to a successful transaction is not without challenges. A relatively limited pool of buyers, combined with valuation considerations and sector-specific constraints, means that the process will require careful execution.

Ultimately, the outcome will depend on the alignment between Codere’s expectations and the strategic priorities of potential acquirers. If successful, a sale could mark the culmination of a significant turnaround and provide a clear exit for its current owners while opening a new chapter for the company under different stewardship.

FAQs

What is Codere planning to do?
Codere is preparing for a potential sale of the business following its recent financial restructuring.

Who is managing the sale process?
Jefferies and Macquarie Capital have been appointed to oversee and manage the sale process.

What is the estimated valuation of Codere?
Early market indications suggest the company could be valued at more than €2 billion.

When could the sale be completed?
The company is reportedly targeting a deal before August, subject to market conditions and buyer interest.

What changes occurred during the restructuring?
The restructuring reduced debt, improved liquidity and transferred control largely to creditors.

Who currently owns Codere?
Ownership is mainly held by bondholders and investment funds, with creditors controlling about 95 percent.

How has Codere’s financial performance improved?
Debt has been significantly reduced and EBITDA has increased, indicating improved financial stability.

Why might the buyer pool be limited?
Some investors face ESG constraints when considering gaming assets, which may limit participation.

What role do advisors play in the process?
Advisors help structure the sale, prepare materials and engage with potential buyers.

What could influence the success of the sale?
Buyer interest, valuation expectations and broader market conditions will all affect the outcome.