Italian lottery operator GTECH is engaged in preliminary 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 that it is considering a broad range of strategic alternatives to maximise shareholder value.
GTECH said that this transaction could potentially involve the use of a mix of cash and equity. 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 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 maximising shareholder value. The IGT board of directors and senior management are currently engaged in such an exploration."
Last Friday, IGT shares rose by 10.52 per cent to close at US$15.86 after it was reported that GTECH and billionaire Ron Perelman's Mac Andrews and Forbes Holdings were competing to buy the Las Vegas slot machine maker. There are reports that private equity firm Apollo Global Management, a co-owner of Caesars Entertainment, was also trying for a bid.
Early last week, the media had reported that IGT was considering putting itself up for sale and had hired Morgan Stanley to explore a possible sale, aiming to combat slow growth. Its stock had reportedly lost 31 per cent of its value due to slow fundamentals in the gaming market. At present, its market value is $3.92bn.
In the past year, several deals have been made involving slot machine manufacturers. Bally Technologies acquired gaming equipment provider SHFL entertainment for $1.3bn and lottery giant Scientific Games bought WMS Industries for $1.5bn.
