Codere Founders Seek €900m Buy-Out of Remaining 14% Stake

The founding family of Spanish gaming giant Codere Group is seeking €900m ($1.1bn/£789.9m) compensation following the firm’s 2018 bankruptcy restructuring.

The Martinez Sampedro family has filed an appeal with Spain’s National Securities Market Commission (CNMV) calling on it to back their demand that Codere’s US investors acquire their remaining 14 per cent stake for €900m.

Codere, which has been mired in financial uncertainty for several years, was taken over by a group of US investors in 2018 who went on to restructure the firm’s €1bn debt arrangements.

The Martinez Sampedro family claims that the US investors should have offered a takeover deal to minority shareholders but ‘purposefully bypassed’ the requirement to do so.

As such the family is seeking compensation after they were removed from the board during the restructure and consequently lost their voting rights.

Codere’s current ownership is reported to be split between Silver Point Capital Management founder Edward Arnold Mule, who indirectly holds a majority stake at 23.35 per cent, with Silver Point itself holding 21.79 per cent and M&G PLC holding 20.97 per cent.

The US investors have dismissed the Martinez Sampedros claim arguing that they had to act in interests of debt holders over existing shareholders in order to rescue the firm from bankruptcy.

Despite investors’ efforts over the last three years, the Madrid-based operator continues to face financial strife. It was badly affected by the covid-19 pandemic due to sites across Spain, Italy and Latin America being closed or operating under restrictions for the past year. Losses were reported to have risen to €237m in 2020, from €67m in the previous year.

Last month, in the firm’s latest bid for survival, it reported it had come to a ‘liquidation agreement’ with creditors, involving the conversion of €350m of Codere debt into equity, in return for investors putting up an additional €225m in cash.