IGT confirms exploring sale option
Gaming supplier International Game Technology (IGT) confirmed on Monday in a statement that it might be sold. Reuters reported last week that the company had hired investment bank Morgan Stanley to field offers from suitors.
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 lottery operator GTech SpA and private equity firm Apollo Global Management LLC, co-owner of casino operator Caesars Entertainment Corp.
But no approach has been confirmed by IGT. The company said: “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.”
Analysts say a potential sale might be positive given the company’s valuation discount to peers and its history. U.S.-based Telsey Advisory Group said a strategic industry buyer could mean a higher bid for IGT.
“We estimate a prospective suitor could pay around US$17/share for IGT in an LBO [leveraged buyout] and still generate a levered IRR [internal rate of return] of 25 percent, valuing the company at US$6 billion,” the brokerage said in a report.
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