Italy's Gtech buying IGT for $4.7B

 

The Associated Press

The Italian lottery operator Gtech is buying slot machine maker International Game Technology for $4.7 billion in cash and stock.

Including $1.7 billion in debt, the companies on Wednesday valued the deal at $6.4 billion.

Gtech said last month that it was in talks with the Las Vegas company and IGT said at the time that it was weighing its options.

IGT stockholders will receive $13.69 in cash plus 0.1819 ordinary shares of the new company for each share they own. This gives IGT shareholders $18.25 per share, which is an approximately 18 percent premium to the company's Tuesday closing price of $15.50. Gtech stockholders will get one share of the new company for each of their existing shares.

IGT and Gtech, which is based in Rome, will form a new holding company called Gtech with corporate headquarters in the U.K. It will have operating headquarters in Las Vegas, Providence and Rome.

Shares of IGT spiked 9 percent to $16.90 before the opening bell in New York.

Gtech will use cash on hand and new financing to fund the cash portion of the deal.

Existing Gtech shareholders are expected to own about 80 percent of the new company's stock, with IGT stockholders anticipated to own the remaining 20 percent stake.

The new company's board is expected to have 13 members, including Gtech CEO Marco Sala, who will become CEO of the new company. IGT will name five of its existing directors to the board. That will include IGT CEO Patti Hart and IGT Chairman Phil Satre. Hart will become vice chairman of the new company and Satre will be the chairman.

Gtech will name seven directors to the new company's board. At least four of them will be independent and one will serve as a vice chairman.

The new Gtech will apply to list on the New York Stock Exchange and IGT shares will cease to be traded there. Gtech's shares will no longer trade on the Borsa Italiana.

The deal is expected to close in the first half of next year if it's approved by shareholders of both companies, as well as regulators.

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