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US – IGT could be up for sale

By - 10 June 2014

International Game Technology could be about to be sold having appointed Morgan Stanley to explore a potential sale.

Sources have revealed that the Las Vegas-based slot giant has been considering the option of a sale for a couple of months with interest coming from rival manufacturers within the gaming industry as well private equity firms. The manufacturer is believed to be holding management presentations for prospective buyers. News of the potential sale saw IGT’s stock soar by 14.4 per cent higher giving a market value of more than $3.5bn.

The company stated: “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 maximizing 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 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. IGT does not intend to discuss or disclose developments with respect to this general subject unless and until the Board has approved a definitive course of action.”

The company reported a 66 per cent decline in earnings and a 15 per cent slide in revenues during the second quarter, ending March 31. Net income fell to $25.7m compared with $78.2m in the same quarter last year whilst net revenues came in at $512.8m in the quarter, representing a 15 percent decrease compared with a year ago.

“During the quarter, we took decisive action to reduce IGT’s cost structure and position the company for long-term earnings growth,” said Patti Hart, CEO of IGT. “Looking forward, we are confident that we will be able to leverage our leaner cost structure, substantial R&D investments and premium brands to drive shareholder value.”

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