Scientific Games (SGMS) - Get Scientific Games Corporation Report said it proposed to acquire the 19% of SciPlay, (SCPL) - Get SciPlay Corp. Class A Report the publisher of digital casino and casual games, that it doesn’t already own for stock valued at about $17.02 a share.
Scientific Games produces casino, interactive and lottery games. It holds 98% of the voting interest in SciPlay. Both companies are based in in Las Vegas.
In a letter to SciPlay’s board, Scientific Games President and Chief Executive Barry Cottle proposed that the company pay 0.25 share for each remaining SciPlay share.
The proposed deal price is an 11% premium to SciPlay’s Wednesday close, based on the two companies' stock prices on that day.
At last check SciPlay shares were trading up 13% at $17.33. Scientific Games was off 4.3% at $65.14.
Scientific Games said it expected SciPlay's board to appoint a panel of independent directors to evaluate the proposal.
Strategically and financially, the two companies together are stronger than they are apart, Cottle said in the letter.
The deal would speed Scientific Games’ goal to become a leading international cross-platform games provider.
“SciPlay will be a key component in Scientific Games’ goal of growing our digital business to be comparable in size with our land-based business within three years,” Cottle said. SGMS recently said it would divest its lottery and sports-betting operations.
Scientific Games said the deal would give SciPlay holders “speed and certainty” and the opportunity to share in the combined company’s upside potential.
On July 7 SciPlay said it acquired Koukoi Games, the Oulu, Finland, developer and operator of casual mobile games. Terms weren’t disclosed.
In the first quarter SciPlay earned 21 cents a share, up 11% from 19 cents in the year-earlier quarter. Revenue rose 28% to $151.1 million.