IGT, Anchor slot machine makers merger moves forward
LAS VEGAS (AP) — Slot machine makers International Game Technology of Reno and Anchor Gaming of Las Vegas have scheduled shareholder meetings Tuesday to vote on a proposed merger of the companies, officials said Monday.
The meetings follow Friday’s announcement by the companies that the Federal Trade Commission approved the merger, clearing the way for the $1.4 billion deal to close by January 2002.
The stock swap would create the largest public company in Nevada.
“This is yet another major step, and in our view the most critical approval needed, for the close of the acquisition, which we believe could potentially occur before year end,” said Jason Ader, a gambling industry analyst for Bear Stearns Co. of New York.
IGT’s buyout of Las Vegas-based Anchor, first announced July 9, was delayed in late August when the FTC asked for more information.
The move indefinitely extended the deal’s “waiting period,” which is mandated under federal antitrust law, and raised speculation that the FTC had antitrust concerns.
“We are not expecting any surprises at either meeting (Tuesday),” Ader said, particularly because IGT’s share price is well within the agreed upon range of $50 to $75 per share.
Had IGT’s stock traded at an average price below $50 per share during the 20 business days before the shareholder meetings, Anchor would have had the right to pull out of the deal, or demand more stock from IGT.
“That (the FTC review) was obviously the biggest hurdle,” said Anchor spokesman Howard Stutz. “We are hopeful to get it (merger) done by the end of December.”
If approvals are received from shareholders, Anchor and IGT officials plan to go before the Nevada Gaming Control Board and Nevada Gaming Commission in a special meeting this week to ask for the regulators’ approval.
“Again, we are not expecting any difficulties,” Ader said Monday.
Following the acquisition of Anchor, Ader projected that IGT could generate earnings per share of $3.50 to $3.60 for fiscal year 2002.
The deal, valued at more than $1.4 billion, calls for IGT to swap its stock for Anchor stock one-for-one, and to assume $430 million in Anchor debt.
IGT stock closed Monday up $1.95 to $66.80 per share.
IGT is the world’s biggest slot machine manufacturer. It also is known for its Megabucks games that produce lottery-sized jackpots at casinos around the state.
Anchor is a slot maker with casinos in Cripple Creek and Black Hawk, Colo., and a slot machine route in Nevada. It also manages a casino for the Pala Band of Mission Indians in northern San Diego County, Calif.
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