GTech confirms talks to buy IGT

Jun 17, 2014 Newsdesk Industry Talk, Latest News, Top of the deck  

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Lottery operator GTech SpA has confirmed it is in talks to buy New York-listed gaming supplier International Game Technology (IGT).

GTech confirmed in a brief press release issued on Monday that “it is engaged in preliminary, exploratory discussions as part of a process regarding a potential transaction with IGT”.

The Milan-listed company added: “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.”

GTech has already engaged advisors to help with the negotiations, the company stated. It provided no value for a potential bid.

IGT confirmed on Monday in a statement that it might be sold.

In Monday’s statement, IGT said it regularly considers a broad range of strategic alternatives, including “business combinations, changes to capital structure and adjustments to portfolio of businesses, with the goal of maximising shareholder value”.

“The IGT board of directors and senior management are currently engaged in such an exploration, but no decisions have been made by the board regarding any particular alternative available to the company,” it said.

On Friday, Reuters reported that at least four firms were pursuing a bid for IGT, including GTech and private equity firm Apollo Global Management LLC, co-owner of casino operator Caesars Entertainment Corp. So far, only GTech has confirmed talks with IGT.

“By our estimates, GTech could buy IGT at US$17/share entirely with debt at 4.3x pro forma leverage, suggesting even greater capacity to outbid a private suitor,” Telsey U.S.-based Telsey Advisory Group said in a report on Friday.

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