Blackstone Eyeing Another IPO Try of Spanish Gaming Operator Cirsa

Posted on: December 12, 2021, 02:23h. 

Last updated on: December 11, 2021, 04:42h.

Private equity behemoth Blackstone Group is considering another initial public offering (IPO) of its fully owned Cirsa Gaming Corporation.

Blackstone Cirsa casino Spain IPO gaming industry
Casino Cirsa Valencia, a Cirsa-owned casino in Spain, is one of the many assets that could lead to the casino operator being valued at roughly $3 billion through an initial public offering. Blackstone Group, which owns the casino firm, is reportedly exploring an IPO for the gaming business. (Image: Cirsa Gaming Corporation)

Blackstone acquired the Spanish casino and gaming operator in 2018 for an undisclosed sum. But the company prior to the acquisition said it was only fielding takeover offers that valued the organization somewhere in the neighborhood of $2.4 billion to $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, the Dominican Republic, and Morocco. Many of the casino properties are little more than gaming parlors featuring a small allotment of slot machines, table games, electronic gaming, and sports betting.

Spanish newspaper Cinco Dias broke the news that Blackstone is mulling an IPO for its Cirsa holdings. The media outlet said Blackstone is targeting an April debut and plans to value the casino group at three billion euros (US$3.4 billion).

IPO Round Two

Cirsa presumably hasn’t been one of the better bets for Blackstone Group, which owns the real estate assets of Bellagio, MGM Grand, and Mandalay Bay on the Las Vegas Strip.

The acquisition started well for Blackstone, as Cirsa reported an operating profit of approximately $418 million in its 2018 fiscal year, a 5.1 percent gain on 2017. Profits rose to $535 million the following year.

Then COVID-19 happened. Like nearly all commercial gaming companies in the world, the pandemic greatly hurt Cirsa operations. The coronavirus continues to cause much uncertainty surrounding the organization, which could be prompting Blackstone to sell some of the casino conglomerate.

It’s not the first time that Blackstone has considered an IPO for Cirsa. In May of 2019, reported on the private equity firm prepping a Cirsa public stock offering.

Like all investment funds, Blackstone has no vocation to remain a major shareholder for a long time. Thus, everything seems to indicate that it will recover an old aspiration of the company: go public,” Carles Huguet, a Spanish financial news reporter, explained at the time.

But that IPO, for reasons not made public, never reached one of the four stock exchanges in Spain. Cinco Dias relays that this time might be different, as Blackstone wants to lessen its exposure in Cirsa. The news outlet said Blackstone is working with investment bank Lazard on advising the Cirsa IPO path.

Betting and Selling

Blackstone certainly has the financial wherewithal to continue its pursuit of Australian casino giant Crown Resorts without selling off Cirsa. Traded on the New York Stock Exchange, Blackstone has a market cap of more than $160 billion.

However, the firm has been very active in the global gaming industry as of late.

Blackstone in September announced a $5.65 billion reshuffling of ownership of The Cosmopolitan in Las Vegas in what will reduce the company’s ownership position in the luxury Strip property. Blackstone acquired The Cosmopolitan in May 2014 for $1.73 billion.

The Cosmopolitan sale came roughly two months after Blackstone announced it would pay MGM Resorts $3.9 billion to purchase 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. The Crown board this month rejected Blackstone’s latest bid of $6.2 billion, but announced it was providing confidential information to the private equity group in order for Blackstone to consider a higher offer.