Paddy Power and Betfair owner Flutter Entertainment is in talks to buy Italian gambling company Snaitech, the consumer division of Playtech, in a deal that could be valued at around £2bn.
“Playtech confirms it is in discussions with Flutter and has granted Flutter a period of exclusivity to complete due diligence and finalise the necessary Transaction documentation,” the company said on Wednesday morning.
A formal agreement is not expected until at least next month, according to Sky News, though the details of the negotiations are said to be significant enough that Playtech might be required to publicly acknowledge them.
Flutter has so far declined to comment on the potential deal.
If completed, the acquisition would value Snaitech at a premium to Playtech’s current market capitalisation. Playtech, a London-listed company, also operates a substantial business-to-business gambling technology arm.
In May, Flutter moved its primary listing to the New York Stock Exchange although its shares continue to trade on the main market of the London Stock Exchange as a secondary listing. The stock has risen 15 per cent year to date in London.
The company has previously described Wall Street as its “natural home” as it focuses on capitalising on the liberalisation of gambling laws in the US, a key growth area for the business.
The potential Snaitech deal follows a series of international acquisitions by Flutter, including the December 2021 purchase of Milan-based Sisal from CVC Capital Partners for £1.62bn.
This acquisition bolstered Flutter’s presence in Italy, where it already operates through its PokerStars and Betfair brands. It remains unclear whether Snaitech would be integrated with Sisal.
More recently, Flutter bought an initial 51 per cent stake in Serbian gambling operator MaxBet Kladionica as part of its strategy to enhance its commercial footprint in the Balkans.
It comes as Flutter has projected a 20 per cent year-on-year increase in group revenue and a 34 per cent rise in adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA) by the end of 2024.
On Wednesday, Flutter upgraded its forecasts after reporting a 20 per cent increase in group revenue to $3.6bn (£2.8bn) for the three months ending 30th June 2024, up from $3bn (£2.3bn) in the same period of 2023.
Shares in Flutter jumped over eight per cent in morning trading.