Entain’s Italy Business Emerges as Likely Next Sale After CEE Deal

Entain may not be finished reshaping its business.

Only days after agreeing to sell a 20% stake in its Central and Eastern European division to EMMA Capital for £366 million, attention has shifted to another part of the gambling group’s portfolio. Analysts now believe Entain’s Italian operations could be the next assets put on the market.

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The CEE transaction, which includes Polish bookmaker STS and Croatian operator SuperSport, values the division at roughly £1.83 billion. Rothschild & Co Redburn analyst Andrew Tam believes that price sends an important signal. At around 9.3 times EBITDA, the deal values the business about 45% higher than Entain’s own trading multiple, suggesting individual assets may be worth more than the company is currently valued at by the market.

Italy Moves Into Focus

Tam sees Italy as the most obvious candidate for another disposal.

Entain operates in the country through Eurobet and Gioco Digitale, giving it an estimated 8% share of Italy’s regulated gambling market. While those brands remain established, they trail larger rivals such as Lottomatica and Flutter, making them potential acquisition targets for companies looking to expand.

Italy has already experienced significant consolidation in recent years, and another major transaction would fit that trend. Tam believes both private equity investors and established gambling operators could be interested if the assets become available.

Based on current market conditions, he estimates an Italian sale could generate between £1.2 billion and £1.6 billion, with valuation multiples broadly in line with those achieved in the CEE transaction.

A Leaner Entain

The latest CEE agreement appears to be more than a one-off sale. Tam views it as the opening stage of a broader portfolio review.

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He noted that the existing relationship between Entain and EMMA Capital, along with the CEE division’s relatively independent structure, made that business the simplest place to start. The transaction also provides a benchmark for valuing other parts of the group.

If Italy follows, Entain’s financial position could change considerably. Tam estimates net debt could fall to roughly £1.5 billion, excluding the group’s £219 million deferred prosecution agreement payment.

A slimmer balance sheet would leave investors focused on what remains, particularly BetMGM, which Tam continues to regard as Entain’s most valuable long-term asset.

Whether the Italian business is officially put up for sale remains to be seen. But after the strong valuation secured in Central and Eastern Europe, expectations are growing that Entain could continue unlocking value by selling non-core assets while sharpening its focus on the US market.

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Source: igamingexpress.com