Flutter Entertainment in Talks to Acquire Playtech's Italian Arm

Flutter Entertainment, the owner of Paddy Power, is reportedly in negotiations to purchase the consumer division of London-listed Playtech in a deal valued at approximately £2 billion. According to Sky News, Flutter, which recently moved its primary listing to the US, is discussing the acquisition of Snaitech, one of Italy's leading gambling companies.

Although the exact stage of the discussions remains unclear, a source indicated that the talks are advanced enough that Playtech might need to publicly acknowledge them. A formal agreement, however, is not expected before next month.

If the deal proceeds, it would value Snaitech at a premium compared to Playtech's current market capitalisation, which includes a substantial business-to-business gambling technology operation. As of Wednesday morning, Playtech's shares were trading around 548p, giving the company a market value of approximately £1.66 billion.

Snaitech, operating under the Snai brand, reported a 5% revenue growth to €946.6 million in the last financial year, maintaining its market-leading position in Italian sports betting. A sale to Flutter would likely position Playtech as a pure-play B2B company, potentially attracting interest from other bidders.

Playtech, led by CEO Mor Weiser, has experienced strong recent results, driven by US expansion in its B2B operations and the strong performance of Snaitech.

The company has been at the center of several takeover attempts and corporate upheavals in recent years. In 2022, Playtech shareholders rejected a takeover bid from Australian company Aristocrat Entertainment. The following year, it was reported that Playtech approached struggling 888 Holdings, now called Evoke, about a potential merger, but the deal fell through.

For Flutter, this acquisition would represent another significant step in the corporate transformation led by CEO Peter Jackson. The company has been expanding its international presence through acquisitions, with Snaitech being the latest target. Flutter previously acquired Sisal, another major Italian group, although it remains unclear whether it will be merged with Snaitech.

On Tuesday, Flutter reported strong financial results for the second quarter, following better-than-expected performance by rival Entain, the owner of Ladbrokes, which also recently appointed a new CEO after a challenging period.

Flutter, now with a market capitalisation of nearly £26 billion, and Playtech have both declined to comment on the potential deal.