Scientific Games abandons plans to purchase remaining stake in SciPlay
Slots giant withdraws offer to acquire remaining 19% equity interest in casual games publisher but insists SciPlay is still a “strategic asset”
Scientific Games has withdrawn its previous all-stock offer to acquire the remaining 19% stake in Nasdaq-listed SciPlay.
The U-turn comes less than six months after the Las Vegas-based supplier announced it would take full control of the social casino and casual mobile games publisher.
The transaction would have resulted in SciPlay shareholders receiving 0.25 shares of Scientific Games stock in exchange for each share of SciPlay stock.
As a result, Scientific Games will retain its 81% stake and 98% voting interest in SciPlay, which is responsible for free-to-play games such as Jackpot Party, Hot Shot Casino and Bingo Showdown.
The announcement to retract the offer triggered a 18% sell-off in the social casino and casual games studio’s shares in pre-market trading.
Barry Cottle, president and CEO of Scientific Games, said that continuing to pursue this opportunity “would not be prudent for our shareholders at this time”.
He added: “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 monetisation.
“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.”
Scientific Games recently announced the sales of its lottery and sports betting divisions for around $7bn, with the firm saying the funds will be used for deleveraging the balance sheet, investing in its core businesses, and M&A.
These transactions are “on track”, the company stated in this latest announcement, and slated to complete in Q2 2022 as the supplier pivots towards becoming a “cross-platform global gaming company”.
In November, Scientific Games posted Q3 revenue of $539m, which was a 25% year-on-year rise.