Scientific Games, SciPlay unable to reach agreement for remaining equity interest

Scientific Games had previously announced its intention to purchase the remaining 19% of SciPlay that it does not currently own.

Scientific Games Corporation has today announced the withdrawal of its previous bid to purchase the remaining 19% of SciPlay. Previously announced in July of 2021, Scientific Games had intended to purchase all of the SciPlay stock that it does not presently own, at a price of 0.250 shares of Scientific Games for each share of SciPlay.

This bid was initially rejected by SciPlay’s special committee set up to complete the agreement; however, discussions continued between the parties. Following today’s news, both parties have seemingly abandoned hope of reaching an agreement.

“In line with our approach to capital management and disciplined M&A we have decided that continuing to pursue this opportunity would not be prudent for our shareholders at this time,” said Barry Cottle, President and Chief Executive Officer of Scientific Games.

“We remain committed to our strategy of leveraging our unparalleled portfolio of hit franchises, world-class talent and premium content engine to develop great games fully cross-platform. SciPlay remains a strategic asset and has the opportunity to drive meaningful value as it grows its social casino market share and expands into the $20bn casual genre leveraging its expertise in engagement and monetization.”

This announcement from Scientific Games follows the decision to sell the company’s lottery and sports betting businesses for approximately $7bn. These sales were made in the hope of de-levering SG’s balance sheet and targeting M&A to grow the company.

“We will continue to invest in this sector in a disciplined manner. Importantly, as we advance our strategy, we will continue to take a holistic approach to capital management as we focus on allocating capital to drive growth in earnings per share,” Cottle continued.

SciPlay, while disappointed regarding the outcome of discussions, remains positive: “Although the Special Committee is disappointed that it and Scientific Games were not able to reach an agreement, both the Special Committee and Scientific Games remain firm in their support of SciPlay’s leading platform of digital games, as well as their belief that SciPlay is at an inflection point and positioned for significant growth.”

Henry Moore

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