Allwyn

Executive Summary & Thesis

Allwyn is the global lottery champion trading at a post-merger dislocation. Having absorbed OPAP in an all-share combination that closed in March 2026 (deal equity value €16bn), the combined, KKCG-controlled group now trades at ~€13.75 — down ~41% over the year and ~32% below the deal value — on a new-share overhang and a thin ~22% free float, not a fundamental impairment. We initiate at a special-situation BUY, PT €17 (~+24%), with a ~9%+ dividend paying us to wait.

The portfolio is the most defensive, PM-insulated cash engine in the sector: exclusive lottery concessions and gaming across the UK (National Lottery), Greece & Cyprus (OPAP), the Czech Republic (Sazka), Italy (Sisal), Austria and the US (Illinois, Georgia). On top of that resilient base sits genuine optionality — a majority stake in PrizePicks (acquired at a $1.6bn valuation), giving Allwyn direct exposure to US daily-fantasy / pick’em and the prediction-market-adjacent space, plus a pending Novibet acquisition. Pro-forma combined EBITDA is ~€1.9bn (LTM, incl. PrizePicks), with double-digit EBITDA CAGR targeted through 2026.

BUY (special situation) · PT €17 (~+24%). Per our convention, the rating is anchored to the SITUATION, not a standalone multiple: a defensive lottery cash-cow bought at a post-merger, low-float dislocation, with three re-rating levers — (1) the overhang clearing as the combination beds in, (2) a planned additional LSE/NYSE listing + index inclusion that should narrow the Athens/float discount, and (3) a fat, growing dividend. The KKCG control (~85% votes), ~22% float and leverage are the price of admission — size for the governance and liquidity, not against the quality.

Business Model & Competitive Forces

A portfolio of government-granted, exclusive, long-dated lottery/gaming concessions — the highest-quality cash flows in gaming — plus a US growth option.

Porter Five Forces

• ▮Barriers to entry — very high (the moat). Lottery concessions are exclusive, government-granted, multi-year licences — the strongest structural moat in gaming, and almost wholly PM-insulated.
• ▮Substitutes / PM threat — low for the core. Prediction markets threaten sportsbook operators, not numerical lotteries; via PrizePicks, Allwyn even gains a foothold in the adjacent pick’em/PM space.
• ▮Buyer power — low. Mass-market retail + online players; no concentration.
• ▮Rivalry — limited within concessions. Exclusivity caps competition in core markets; rivalry is at the bidding/renewal stage.
• ▮Supplier power — low-moderate. Allwyn increasingly owns its technology/content stack, reducing dependence.

The Special Situation

This is the crux: a just-closed, controlled combination trading well below its deal value, with clear re-rating catalysts.

• ▮The combination (closed 24 Mar 2026). Allwyn contributed its assets into OPAP for new shares; the combined entity (equity value €16bn) was renamed Allwyn, re-domiciled to Switzerland, and remains listed on Athens (ALWN). KKCG ~78.5% economic / 85% voting; ~22% free float (~166m shares).
• ▮The dislocation. Post-close, the stock derated to ~€13.75 (mkt cap ~€10.9bn) from a 52-wk high of €20.92 — a ~€5bn gap to the deal value, driven by the 445.7m new-share overhang and thin float rather than fundamentals (lottery cash flows are intact).
• ▮Catalyst 1 — overhang clears. As the combination beds in and the free float stabilises, technical selling pressure should ease.
• ▮Catalyst 2 — international listing. Allwyn intends an additional LSE or NYSE listing (timing debated — some see 2027); a major-exchange listing + index inclusion would broaden the shareholder base and narrow the Athens/low-float discount.
• ▮Catalyst 3 — the dividend. A €0.80 post-close distribution plus the regular dividend (OPAP’s long history of fat payouts) underpins a ~9%+ yield — strong carry while the re-rating develops.

Minority signal: the cash exit right (€19.04/share) saw limited take-up — most OPAP minorities elected to stay in the combined company, a vote of confidence in the combined entity’s value over the cash-out.

Financials

Figures in EUR. Care is required: data-provider trailing figures still largely reflect OPAP standalone; the combined group is far larger.

Read-with-care flag. Vendor TTM screens show ~€2.4bn revenue / ~€0.82bn EBITDA / P/E ~10× — these are essentially OPAP-standalone. The combined Allwyn is much bigger: group revenue ~€9bn and pro-forma EBITDA ~€1.9bn (LTM, incl. PrizePicks). Use the combined figures for forward valuation; net debt / EV below are OUR estimates.

Quality of earnings: high at the core — concession-backed, recurring, cash-generative lottery revenue with strong margins and a long dividend record. The qualifiers are leverage (acquisition-funded) and the noise of a freshly combined reporting base.

Forecast

Management targets double-digit EBITDA CAGR (2024–26), with the combination guided to be double-digit accretive to OPAP adjusted EPS and FCF per share in the first full year.

• ▮UK National Lottery scaling: the 10-year concession moves past transition costs toward its profit potential — a multi-year EBITDA tailwind.
• ▮Synergies + own-tech: shared technology, content and AI across the enlarged group reduce third-party dependence and lift margin.
• ▮PrizePicks + US: the DFS/pick’em growth option scales on a defensive base; Novibet (pending) adds online betting.
• ▮Dividend growth: a capital-allocation framework promising “material, resilient” distributions; some analysis models a €1.00+ steady-state dividend.
• ▮Our read: on ~€1.9bn combined EBITDA, the current ~€10.9bn cap looks too cheap for a concession-backed compounder once the overhang clears and a second listing arrives.

Valuation & Scenarios

At ~€13.75 (mkt cap ~€10.9bn) on ~€1.9bn pro-forma EBITDA, Allwyn trades at a single-digit EV/EBITDA (estimate ~8–9× EV/EBITDA, or ~6–6.5× on more aggressive net-debt/synergy assumptions) — a discount to its €16bn deal value and to global lottery peers, explained by control, float and integration noise. Our €17 PT (~+24%) anchors to the situation: a partial re-rating toward deal value as catalysts land, supported by the dividend.

Risks & Verdict

The risks are governance, structure and leverage — not the underlying cash flows.

• ▮Control & minority position. KKCG holds ~85% of votes; public holders are minorities in a controlled company — related-party and capital-allocation governance must be trusted.
• ▮Float / liquidity overhang. ~22% free float and the 445.7m new-share issuance create technical pressure and limited liquidity — the core reason for the dislocation, and a risk if it persists.
• ▮Second-listing timing. The LSE/NYSE catalyst may slip to 2027+, delaying the re-rating.
• ▮Leverage. Acquisition debt (UK NL, Sisal, PrizePicks) is significant; rising rates or integration slippage would pressure the dividend.
• ▮Regulatory / concession. Lottery licences face renewal risk; PrizePicks faces the US DFS-vs-prediction-market regulatory battles; UK NL operating obligations.
• ▮Integration. Merging large multinational operations carries execution risk.

VERDICT: BUY (special situation) · PT €17 (~+24%). The best risk/reward expression of the PM-insulated thesis: a concession-backed, defensive lottery champion — the global No.2 — bought at a post-merger, low-float dislocation ~32% below its own deal value, paying a ~9%+ dividend, with overhang-clearing and an international listing as re-rating catalysts, plus PrizePicks optionality on top. The KKCG control, thin float and leverage are real and warrant a measured, governance-aware position size — but the quality and the dislocation are the opportunity. Anchors the lottery-operator segment.

SOURCES & FLAGS. Price ~€13.75 (Investing.com/Stockopedia/CNBC/TradingView, 11–12 Jun 2026; ATHEX: ALWN; ISIN GRS419003009; 52-wk €11.66–20.92; mkt cap ~€10.9bn). Combination terms + completion (closed 24 Mar 2026; €16bn equity value; KKCG ~78.5% econ / 85% voting; ~22% float / 166.4m free-float shares; 445.7m new shares; €19.04 exit right limited take-up; €0.80 post-close dividend; re-domicile to Switzerland) via Allwyn/KKCG releases, Reuters, focusgn, acquiry, lotterydaily. Financials: Allwyn H1’25 rev €4.5bn +6% / EBITDA €728m +4%; pro-forma combined EBITDA ~€1.9bn (incl. PrizePicks); vendor OPAP-standalone TTM ~€2.4bn rev / ~€0.82bn EBITDA / P/E ~10× (FLAGGED as standalone, not combined). PrizePicks majority stake at $1.6bn valuation; Novibet pending. Street: JPM €13.60, Investing.com avg ~€14.6, Stockopedia consensus ~€17.70. Combined revenue ~€9bn, net debt, EV/EBITDA (~6–9×) and dividend-yield normalisation are OUR estimates / order-of-magnitude. Rating, PT and scenarios are OUR assessment.

DISCLAIMER. Internal research note for informational purposes; not investment advice, an offer, or a solicitation.