GTECH plots IGT acquisition
Italian lottery operator and supplier announces the two companies are currently engaged in "exploratory talks"
GTECH is eyeing up a potential acquisition of International Game Technology (IGT) with the two firms in “preliminary and exploratory talks”.
The lottery operator and supplier made the announcement this morning, following weekend reports the company was plotting a bid, and said it had hired advisers to help assist the company in the potential acquisition.
“This transaction could potentially involve the use of a mix of cash and equity as consideration,” GTECH said in a statement this morning.
“However, the Company does not anticipate that a capital increase for cash will be required [and] there can be no assurance that any binding agreement or transaction will result from these discussions,” the statement added.
On Friday Reuters reported that GTECH and billionaire Ron Perelman’s MacAndrews & Forbes Holdings were competing to buy the Las Vegas-based company, while private equity firm Apollo Global Management and buyout firm Carlyle Group were also linked to an acquisition.
This morning IGT also issued a statement that the company was exploring various strategic options to “maximise shareholder value” but said no decision had been taken on a particular course of action.
“No decisions have been made by the Board regarding any particular alternative available to the Company and there can be no assurances that any transaction or other strategic change will be entered into as a result of the current exploration of alternatives,” the statement said.
The news follows reports earlier last week that IGT had appointed Morgan Stanley to handle a potential sale which led to IGT’s share price soaring 14% in a single day to US$14.31 in its biggest one-day jump since 2009.
However, IGT’s share price remains down by 13% for the year-to-date following a prolonged slump in revenues and profits.
The slots manufacturer posted a 15% year-on-year fall in revenues for the second quarter of 2014 to $513m (£305m), despite a strong performance from its social gaming division DoubleDown Interactive, which it bought for $500m in 2012.
At the time of writing IGT’s share price stood at $15.86 on the New York Stock Exchange, while Milan-listed GTECH’s price dropped to 19.47 this morning.