In Spain and the founding family behind local gaming operator Codere SA is reportedly demanding that a pair of American investors be required to pay at least €900 million ($1.09 billion) for its large stake in the Madrid-headquartered firm.

According to a Thursday report from SBCNews, the Madrid-listed entity was established by Jose Antonio Martinez Sampedro in the 1980s and is today responsible for land-based and online gaming operations in Spain, Mexico, Argentina, Italy, Uruguay, Colombia and Panama. However, the source detailed that the founder was ousted as the Chief Executive Officer for Codere SA in 2018 as part of a plan that restructured company debts worth an estimated €1 billion ($1.21 billion).

Coronavirus consequences:

Codere SA subsequently saw its business hit hard by the coronavirus pandemic with most of its land-based venues being forced to close or operate at reduced capacities for much of last year. This resulted in its annual deficit for 2020 rising by over 253% year-on-year to roughly €237 million ($286 million) even after it issued some €500 million ($604 million) in new super-senior notes.

Rescue route:

American equity and bond investment managers Jupiter Fund Management and Invesco Asset Management then stepped in last month to propose an arrangement that would see them buy out the operator’s remaining shareholders and provide the company with around €225 million ($271 million) in additional cash so as to help boost its immediate liquidity.

Authoritative application:

But the Martinez Sampedro family has now reportedly filed an official appeal with Spain’s National Securities Market Commission asking that the proposed buyers be obliged to hand over a minimum of €900 million for its 14.1% stake in Codere SA. The petition purportedly asserts that the amount would serve as ‘justifiable compensation’ after the group had its voting rights terminated in the wake of the 2018 restructure.

Prominent players:

Silver Point Capital Management fund manager?Edward Arnold Mule is reportedly the largest single shareholder in Codere SA courtesy of a 23.36% stake followed by his firm with a 21.79% interest. London-listed investments giant M&G is purportedly also a major player via a 20.97% holding with a further 8.79% of the operator’s issued shares being controlled by Abrams Capital Management.

Direct disdain:

The Martinez Sampedro are reportedly moreover contending that Jupiter Fund Management and Invesco Asset Management violated Spanish financial rules by ‘purposely bypassing’ a takeover recommendation to minority shareholders once they had amassed a 30% stake in Codere SA. The would-be American buyers have purportedly dismissed both aspects of the appeal and asserted that their duties are to the operator’s investors and that the takeover is necessary to save the firm from almost certain bankruptcy.