GTECH and IGT amend acquisition terms to speed up completion

Italy’s GTECH has amended the terms of its acquisition of US gaming supplier International Game Technology (IGT) in order to improve the timing and certainty of completion of the transaction in the interests of both companies and their shareholders. GTECH agreed a $6.4bn deal to acquire IGT earlier this year in July, with the total price comprising $4.7bn in cash and stock and the assumption of $1.7bn in net debt.

The aggregate amount of stock and cash to be paid to IGT shareholders has remained unchanged, although the amendment eliminates the mechanism for IGT shareholders to elect all-stock, all-cash consideration, or a mixed election, subject to proration (a corporate action in which the available cash or shares are not sufficient to satisfy the offers tendered by shareholders).

Upon completion of the merger, all IGT shareholders will receive $13.69 in cash plus 0.1819 shares of newly formed UK holding company NewCo, for each share of IGT common stock.

“The amendment also reflects a reduced number of required approvals from gaming regulators as a condition precedent to closing,” said GTECH and IGT in a joint statement.

Additionally, GTECH’s majority shareholder De Agostini will continue to have the right to select seven members to the thirteen-member combined company board, although the amendment reduces the number of those directors who meet the independence standards of the New York Stock Exchange from four to three.

“GTECH and IGT entered into the amendment with the overall intent of improving the timing and certainty of completion of the transaction in the interests of both companies and their shareholders,” said the companies.
“In particular, providing IGT shareholders with the aforementioned election mechanism would have had the effect of imposing additional regulatory and disclosure requirements that would have made the transaction process unduly complex and burdensome and caused delays to its completion timetable.”

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