Lottomatica’s shares fell 9.1% to €22.51 on Tuesday, extending losses that pushed the stock toward the lower end of its 52-week range between €18.66 and €28.29. The decline followed a technical breakdown below the 200-day moving average, with trading volumes exceeding the 30-day average.
The drop reflects investor concerns over a binding all-stock merger between Lottomatica and Spanish gaming group Cirsa Enterprises, announced on September 2 after board approvals the previous day. The deal, valuing Cirsa at €2.8 billion, will create the world’s second-largest publicly traded gaming and sports betting operator, with a combined pro forma adjusted EBITDA of roughly €2 billion. Cirsa shareholders will receive 0.668 new Lottomatica shares for each Cirsa share, while Lottomatica’s current shareholders will retain 67.5% of the merged entity.
The transaction raises dilution risks, compounded by Cirsa’s plan to distribute a €262 million extraordinary dividend to its shareholders before completion. Blackstone, through its vehicle LHMC Midco, will become the largest single shareholder with a 24% stake post-merger. The all-stock structure and dividend outlay have prompted questions about the combined company’s short-term financial flexibility.
The merger is slated for completion in the second quarter of 2027, with the new entity to list in Milan and Madrid. Management has targeted €115 million in annual pre-tax cash synergies from the integration.
Broader market pressures may have exacerbated the selloff. Italy’s FTSE MIB index declined in the prior session amid escalating Middle East tensions, while Eurozone inflation accelerated to 3.3% in August—the highest in nearly three years—fueling bets on an ECB interest rate hike. U.S. equities also slipped, with the S&P 500 down 0.3% and the Nasdaq down 0.6%.
