On Air Now

Current Show

Jerry Bader   8:30 AM - 11:00 AM

Text "JBSHOW" to 79489 and get updates from me. Email me at: jerrybadershow@mwcradio.com

Show Info »

Upcoming Shows

Program Schedule »

Listen

Listen Live Now » 1360 AM Northeast, WI 97.5 FM Green Bay, WI

Weather

Current Conditions(Green Bay,WI 54303)

More Weather »
71° Feels Like: 71°
Wind: W 8 mph Past 24 hrs - Precip: 0”
Current Radar for Zip

Today

Scattered Thunderstorms 77°

Tonight

Mostly Clear 56°

Tomorrow

PM Thunderstorms 77°

Alerts

Italy lottery group GTECH in talks to buy International Game

By Francesca Landini

MILAN (Reuters) - Italian lottery operator GTECH is in preliminary talks to buy Las Vegas-based International Game Technology (IGT) in a cash and shares deal that would make it a significant player in the casino slot machine business.

GTECH said on Monday it had hired advisers to help it negotiate a deal, confirming what sources told Reuters last week. It gave no value for the potential bid.

IGT decided to seek a buyer after its stock slid by almost a third because of weak demand in the gaming market. Three rival bidders plan to make formal offers alongside GTECH, according to people familiar with the situation, but none have gone public with their plans.

"This transaction could potentially involve the use of a mix of cash and equity," GTECH said, adding it would not need to sell new shares to raise the cash for the deal.

IGT shares rose almost 11 percent on Friday after the Reuters report, giving it a market value of close to $4 billion.

The company had $2.2 billion of debt at the end of March, giving it an enterprise value of around $6 billion.

Buying the U.S. company would help Rome-based GTECH increase revenues from abroad and diversify its lottery management business into casino slot-machines.

"GTECH's share in the slot-machine market is only around 1 percent at the moment," said an analyst at a brokerage based in Milan.

Analysts warned, however, that the U.S. company would be a big acquisition for GTECH to digest.

"IGT is a very large prey for GTECH. This means it would take years to integrate the new company," a second analyst said.

GTECH, known until recently as Lottomatica Group, is the world's largest operator of lotteries, running Italy's Lotto game and several U.S. state lotteries. It has a market capitalization of around $4.64 billion.

Funding the acquisition partially by issuing new stock would dilute existing shareholders, the first analyst said.

GTECH is roughly 60 percent owned by Italy's De Agostini Group, which expanded its Lottomatica empire in 2006 with the acquisition of U.S. gaming company GTECH.

At the end of 2013, the Rome-based company derived 60 percent of its revenues from Italy, with the rest coming from businesses in the Americas and the rest of the world.

Shares in GTECH were down 2 percent at 19.25 euros at 1015 GMT, while the Milan benchmark index was down 0.6 percent.

People familiar with the matter told Reuters on Friday that GTECH was competing with billionaire Ron Perelman's MacAndrews & Forbes Holdings to acquire the U.S. company, which makes slot machines bearing a variety of brands such as that of TV show "Wheel of Fortune". [nL2N0OU0ZD]

Private equity firm Apollo Global Management LLC, a seasoned investor in the U.S. gaming sector, is also pursuing a bid, as is buyout firm Carlyle Group LP, the people said.

The parties made preliminary takeover offers for IGT and are preparing to submit binding bids in the next few weeks, they said.

"No decisions have been made by the board regarding any particular alternative available to the company," IGT said on Monday in response to the Reuters report. [nWNBB04LPE]

(Editing by Sophie Walker and Tom Pfeiffer)

Comments