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Australian fund purchases stake in Scientific Games 

Wed, Sep 16, 8:40am by Mia Chapman

An Australian fund is poised to purchase a 34.9 per cent stake in Scientific Games.

Casino News Daily reports the major provider of gambling products and services confirmed on Monday that Australian fund Caledonia will purchase the stake from MacAndrews and Forbes Incorporated.

MacAndrews and Forbes is managed by billionaire investor Ron Perelman, who said earlier this year he wanted a “less complicated and less leveraged business life” and has been looking for ways to reduce his portfolio as several of his companies have been impacted by the coronavirus pandemic.

Caledonia has reached an agreement with MacAndrews and Forbes to buy nearly 35 per cent of Scientific Games, at a price of $28 per share.

As a result of the transaction, Scientific Games said it would implement a series of governance changes and enhancements.

This will see the gambling technology giant revamp its board of directors and terminate its stockholders agreement with MacAndrews and Forbes.

Caledonia is a Sydney-headquartered global investment management firm.

Aside from its newly acquired stake in Scientific Games, the investor owns a 10.4 per cent stake in Dublin-based Flutter Entertainment, which owns major brands such as Paddy Power, PokerStars and Sky Betting.

Scientific Games said its board will be restructured to include all existing directors except its MacAndrews and Forbes representatives, as well as three new directors.

Former Aristocrat chief executive Jamie Odell and former Aristocrat chief financial officer Toni Korsanos will join the company’s board as executive chair and executive vice chair, respectively.

Mr Perelman, current executive chairman of the Scientific Games Board, will be serving as an additional independent non-executive director, while Barry Schwartz and Frances Townsend, the two other MacAndrews and Forbes representatives, will resign following the completion of the transaction. 

Scientific Games said its revamped board will oversee the implementation of “transformative strategies” and will be working to optimise the company’s business portfolio and shareholder value.

Some of these strategies include accelerating debt reduction efforts and increased focus on online gaming and sports betting growth opportunities.

Shares in Scientific Games tanked earlier this year as land-based casinos using the company’s gambling machines closed doors to curb the spread of the virus.

Its stock price has recovered some of the losses it sustained, but the negative impact from the worst health panic the world has experienced is clear.

Scientific Games recently announced several more important deals as it looks to grow its presence in regulated US sports betting markets.

In early September, the company extended an existing partnership with Wynn Sports, the sports gambling operation of casino powerhouse Wynn Resorts, to include the states of Colorado and Indiana.

Rhode Island lottery tug of war continues

A major competitor in the worldwide gambling market has jumped back into the Smith Hill debate over a proposed no-bid, 20-year lottery contract for International Game Technology with an offer to give the state a better deal.

Providence Journal reported in July that IGT pushed back on Monday against the effort by the Las Vegas-based Scientific Games to regain a piece of Rhode Island’s gambling business – instant tickets – that it lost in 2017.

IGT chairman Robert Vincent also pushed back against critics saying the reworked legislation up for a hearing at the State House “weakens” the definition of the kinds of jobs that would count toward IGT’s 1,100-job commitment to Rhode Island.

Rather than weakening the bill, Mr Vincent said the added language “tightens” it, by reflecting the way IGT’s current contract has been interpreted since 2005, including, for example, the full-time contract employees in the company’s print shop.

He provided a copy of the development agreement the company, then known as GTECH, had with the state’s Economic Development Corporation.


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