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OPAP | First thoughts - Allwyn deal: Brave new era; from yield to growth

Transformative deal with Allwyn – Allwyn and OPAP have announced they have agreed to merge through an all-share combination, creating the world’s 2nd-largest listed lottery and gaming operator with a combined equity value of €16bn. The new group will retain its primary listing on the ATHEX, while pursuing a secondary listing in London or New York after completion. It will be renamed Allwyn and re-domiciled to Switzerland, aligning with Allwyn’s global headquarters. Allwyn, which already owns 51.8% of OPAP, will hold 78.5% of the merged entity, leaving OPAP minorities with 21.5%. The transaction, approved unanimously by both boards, will be implemented via a hive-down of OPAP’s operations into Greek subsidiaries, followed by a cross-border conversion to Luxembourg and subsequent transfer to Switzerland. Completion is targeted for H1-26, subject to shareholder and regulatory approvals. Dissenting shareholders may exercise an exit right at €19.04/share, with the deal conditional on less than 5% of the share capital opting out. A conf call will follow at 12:30 UK time (+44 (0) 800 368 1063; 0; ; +44 (0) 203 0595 872).

… aimed at unlocking global scale – The combination transforms OPAP’s strategic scope. The new Allwyn will generate €5.2bn of net revenue and €1.9bn of pro-forma EBITDA, spanning 7 lottery markets and fast-growing digital verticals — including Betano, Novibet and PrizePicks (pending completion). Roughly 55% of net gaming revenue will stem from online, giving the group clear exposure to global digitalisation trends. It also offers minorities access to a higher-growth, geographically diversified, technology-enabled business, especially since the domestic GGR prepayment benefit for OPAP (worth c€235m EBITDA p.a.) will likely phase out post-2030.

The numbers – On our PF calculations, the combined entity’s equity value of €16.2bn and OPAP minorities equity stake of 21.5% means that Allwyn assets have been valued at a bit more than 13x EV/EBITDA, quite reasonable given the global reach & growth profile. As such, the transaction does not seem to have premiumised either party — it simply combines a “fair” valuation for both parties into a single structure. We note that OPAP shareholders will receive besides the already announced interim dividend (€0.50, in November) a €0.80 cash return (as remaining DPS for FY25) after completion of the transaction. In the medium term, mgt commits to a min annual DPS of €1/share from FY26 onwards, aligned with OPAP’s current policy (but indicating much lower yield).

Our take: broader platform but completely different thesis – In our view, the transaction primarily serves Allwyn’s objective of securing a public listing vehicle rather than unlocking material upside for OPAP minorities. It fundamentally reshapes OPAP’s investment profile, moving it away from its long-standing appeal as a high-yield, defensive stock favoured by income funds and toward a more leveraged, growth-oriented group. The deal’s complex structure, featuring preferred shares and cross-border steps, adds execution and governance risk, while the PF leverage (2.5x target) is somewhat more elevated than investors in OPAP have been used to. Moreover, near-term real earnings uplift is modests, given that OPAP continues to benefit from the temporary boost of the reduced cash gaming duty until 2030.