GTECH in preliminary talks for purchase of IGT

2014-06-16

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(Italy / US).- Italian lottery operator GTECH has announced today that it is engaged in preliminary, exploratory talks regarding a potential transaction with IGT. GTECH said it has engaged advisors to assist it in exploring this potential transaction. Meanwhile, IGT has confirmed today that it considers a broad range of strategic alternatives, and has currently engaged in an exploration of alternatives to maximize shareholder value.

Gtech said that this transaction could potentially involve the use of a mix of cash and equity as consideration. However, the company does not anticipate that a capital increase for cash will be required. There can be no assurance that any binding agreement or transaction will result from these discussions.

In a statement, IGT, a provider of casino gaming entertainment, said, "IGT regularly considers, and on occasion explores, a broad range of strategic alternatives, including but not limited to business combinations, changes to our capital structure and adjustments to our portfolio of businesses, with the goal of maximizing shareholder value. The IGT Board of Directors and senior management are currently engaged in such an exploration..."

IGT said its Board is yet to take any decisions regarding any particular alternative available to the company. The firm added that there can be no assurances that any deal or other strategic change will be entered into as a result of the current exploration of alternatives. It also said that until the Board has approved a definitive course of action, it will not discuss or disclose developments.

On Friday, shares of International Game Technology surged US$ 1.51 or 10.52 percent to close at US$ 15.86, after it was reported that Gtech and billionaire Ron Perelman's Mac Andrews & Forbes Holdings are competing to buy the Las Vegas slot machine maker.

As per reports, private equity firm Apollo Global Management, a co-owner of Caesars Entertainment was also trying for a bid.

Last Monday, media had reported that International Game Technology was considering putting itself up for sale, and has hired Morgan Stanley to explore a possible sale, aiming to combat slow growth. Its stock reportedly had lost 31 percent of its value due to slow fundamentals in the gaming market. At present, International Game Technology's market value is US$ 3.92 billion.

In the past year, several deals were made involving slot machine makers. Bally Technologies acquired gaming equipment provider SHFL entertainment for US$ 1.3 billion, and lottery giant Scientific Games bought slot machine maker WMS Industries for US$ 1.5 billion.

In Italy, Gtech shares are currently trading at 19.41 euros, down 0.25 euros or 1.27 percent.