Blackstone plans another IPO try on Spanish games operator Cirsa
Posted on: Dec 12, 2021, 2:11 p.m.
Last update on: December 11, 2021, 4:42 a.m.
Private equity giant Blackstone Group is considering another initial public offering (IPO) of its fully owned Cirsa Gaming Corporation.
Blackstone acquired the Spanish casino and gaming operator in 2018 for an undisclosed amount. But the company before the acquisition said it was only making takeover bids that valued the organization between $ 2.4 billion and $ 3 billion. Forbes estimates that the final purchase price was $ 2.6 billion.
Cirsa is the gaming empire of Spanish billionaire Manuel Lao Hernandez.
Today, the company owns and operates 42 casinos in seven countries: Spain, Colombia, Panama, Peru, Mexico, Costa Rica, Dominican Republic and Morocco. Most casino properties are little more than gambling halls with a small batch of slots, table games, electronic games, and sports betting.
spanish newspaper Cinco Dias announced that Blackstone is considering an IPO for its holdings in Cirsa. The outlet said Blackstone is targeting its debut in April and plans to value the casino group at three billion euros ($ 3.4 billion).
IPO Round 2
Cirsa probably hasn’t been one of the best bets for Blackstone Group, which owns the real estate assets of Bellagio, MGM Grand and Mandalay Bay on the Las Vegas Strip.
The acquisition got off to a good start for Blackstone as Cirsa reported operating income of approximately $ 418 million in its fiscal 2018, a 5.1% gain from 2017. Profits reached 535 million dollars the following year.
Then COVID-19 happened. Like almost all commercial game companies around the world, the pandemic has severely affected Cirsa’s operations. The coronavirus continues to cause a lot of uncertainty around the organization, which could prompt Blackstone to sell part of the casino conglomerate.
This isn’t the first time Blackstone has considered an IPO for Cirsa. In May 2019, Casino.org reported that the private equity firm was preparing a takeover bid for Cirsa shares.
Like all investment funds, Blackstone is not intended to remain a benchmark shareholder for long. Thus, everything seems to indicate that it will rediscover an old aspiration of the company: to go public ”, Carles Huguet, a Spanish financial journalist, explained at the time.
But this IPO, for reasons not made public, never reached one of the four Spanish stock exchanges. Cinco Dias relay that this time could be different, as Blackstone wants to reduce its exposure to Cirsa. The outlet said Blackstone was working with investment bank Lazard to advise the path of Cirsa’s IPO.
Bet and sell
Blackstone certainly has the financial means to pursue its quest for Australian casino giant Crown Resorts without selling Cirsa. Listed on the New York Stock Exchange, Blackstone has a market capitalization of over $ 160 billion.
However, the company has been very active in the global gaming industry lately.
Blackstone announced in September a $ 5.65 billion Las Vegas ownership reshuffle of The Cosmopolitan, which will reduce the company’s ownership position in luxury Strip property. Blackstone acquired The Cosmopolitan in May 2014 for $ 1.73 billion.
The sale of Cosmopolitan came about two months after Blackstone announced it would pay MGM Resorts $ 3.9 billion to buy the Strip’s Aria Resort and Casino and its non-gaming sister property, Vdara.
Crown, however, remains Blackstone’s biggest target in the gaming industry. Crown’s board this month rejected Blackstone’s latest $ 6.2 billion bid, but announced that he was providing confidential information to the private equity group so that Blackstone could consider a higher bid.