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Shares in Spanish casino operator Cirsa held steady on the company’s stock market debut in Barcelona after the Blackstone-owned company pressed ahead with its initial public offering in the face of heightened stock market turbulence.
Cirsa’s shares initially rose as much as 6.7 per cent to €16 at the open, pushing its stock market value to €2.7bn, compared with an IPO valuation of €2.5bn. But the shares subsequently pared those gains to close at €15, in line with its IPO price.
It was Spain’s second-largest IPO this year — oversubscribed multiple times — with one investor saying the books were covered “very quickly”.
Cirsa, which operates roughly 450 casinos in 11 countries, raised €400mn in fresh capital by issuing 26mn shares, resulting in a free float of roughly 18 per cent. The total offering at its IPO may increase to €521mn if an overallotment option is exercised in full.
A successful listing for Cirsa marks a rare bright spot in Europe’s IPO market after the delay of several planned flotations in recent weeks.
A plan to float another Blackstone company, Hotel Investment Partners, has recently been delayed after the US private equity firm became nervous about market conditions, according to people familiar with the matter. Blackstone declined to comment.
IPO markets have been becalmed since a boom during the pandemic, as tougher macroeconomic conditions and geopolitical tumult take hold.
Conflicts in the Middle East and the threat of US tariffs have resulted in a fresh bout of market turbulence in recent months. In the first half of this year, 46 businesses have floated on European exchanges, compared with 61 last year, according to Dealogic.
Cirsa opened its first casino in Spain in 1985 and was acquired by Blackstone at an enterprise value of about €2.1bn in 2018.
Since 2015, the company has continued an acquisition spree in which it has spent roughly €1.2bn on 130 deals over the past decade. Recent purchases include acquisitions of majority stakes in Peruvian sports betting operator Apuesta Total and Casino Portugal.
Last year, Cirsa’s net revenues rose 8 per cent to €2.2bn and its earnings before interest, depreciation and amortisation increased 11 per cent to €699mn, compared with the previous year.
The company’s executive chair Joaquim Agut said becoming a public company would enable it to grow faster and reduce its net debt, which stands at €2.37bn.
Blackstone’s original investment in Cirsa was financed with about €1.5bn of debt. Two years later Cirsa borrowed another roughly €400mn to fund a dividend to its new owner.
Cirsa is sat within a Blackstone fund with significant exposure to businesses that were heavily impacted by pandemic-era lockdowns. The vehicle ended up holding some of these companies for longer than anticipated as a result, including Cirsa.
Cirsa’s valuation at its IPO price translates to an equity value that is more than 2.5 times the equity Blackstone invested, according to a person familiar with the matter.
Cirsa said in its prospectus that it had set its sights on another 100 potential acquisition targets, mainly in Latin America and Spain. It plans to spend between €400mn and €500mn on deals over the next three years.
“All these guys have to do is to buy the right companies . . . The upside is not incredible but they can keep growing on that model. It is looking pretty solid,” said one large investor who bought shares in the IPO.
Cirsa’s shares are arriving in the market at a buoyant time for other European gambling companies.
Shares in Lottomatica, the fast growing Italian gambling operator floated by private equity group Apollo in 2023, have risen more than 80 per cent this year.
Meanwhile, shares in British operator Rank Group, which owns Grosvenor casinos, are up more than 65 per cent over the same period, ahead of the introduction of regulations allowing more gaming machines per venue.
Additional reporting by Ivan Levingston in London and Barney Jopson in Madrid
