Scientific Games Withdraws Offer to Acquire Remaining SciPlay Equity
The online gaming provider Scientific Games has rescinded an offer it had made to acquire the remaining equity interest in the game publisher, SciPlay. The initial offer was made by the company back in July but it has decided it would not be in the interest of its shareholders to pursue the deal.
Change of Course for Scientific Games
The original bid that was offered by Scientific Games would see them acquire 19% equity interest in SciPlay. Per the conditions of the bid, each shareholder at SciPlay would receive 0.25 shares of SG in exchange for one share at SciPlay. It would also see Scientific Games get 81% economic interest and get a 98% voter share in SciPlay.
The decision to withdraw the bid has come down to the company’s decision to change its approach to make value for shareholders. The company’s CEO Barry Cottle has said that they want to look at its approach to capital management and merger and acquisitions. They added that they remain committed to using their portfolio of quality products to leverage good deals.
They did add that SciPlay still represented a potential asset of interest. The company’s growing social market share and the possibility to expand could provide it with additional value. They said that they will still maintain their disciplined approach to investing in this sector.
More Sensible Approach Taken
Scientific Games has changed its business strategy to focus on shareholders. Firstly, it has begun to divest some of its assets. This started in September when it agreed to the sale of its sports betting platform OpenBet to the Endeavor Group in a deal that was worth $1.2 billion.
Following this in October, the Canadian investment firm Brookfield purchased Scientific Games Lottery business for $6 billion. The company will receive $.5.8 billion of this immediately, with the remaining being paid over two years. Both this and the Endeavour Group deal will be finished in the second quarter of 2022.
Divesting assets is not all that has been keeping Scientific Games busy. The company remains focused on investing in its core business and pursuing other exciting M&A opportunities. One such move has seen SG acquire the live casino provider of Authentic Games, with the live casino market being one it is keen to explore. Scientific Games has also added ELK Studios to its production capacity. As part of this deal, Scientific Games will be able to distribute ELK’s content in key markets including both the USA and Canada, both of which are key markets that SG has begun to explore.
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