Scientific Games Withdrew Offer for SciPlay Remaining Equity

Gaming technology and services provider Scientific Games (SG) announced this week that it would no longer pursue to acquire the remaining equity interest in SciPlay.

SciPlay Offer Rescinded

SG decided to reverse its previous decision to acquire the remaining 19% equity interest in SciPlay. According to the bid tabled in July, SG offered each shareholder at SciPlay to receive 0.25 shares of SG for each share of SciPlay. If the deal would go through, SG would retain 81% economic interest and acquire 98% voting interest in SciPlay.

Commenting on the company’s decision to withdraw its offer, SG president and CEO Barry Cottle focused on SG’s “approach to capital management and disciplined M&A” in relation to creating value for its shareholders.

“We remain committed to our strategy of leveraging our unparalleled portfolio of hit franchises, world-class talent and premium content engine to develop great games fully cross-platform.”

Barry Cottle, President and CEO, Scientific Games

Cottle reiterated SG’s stance that SciPlay continued to represent a strategic asset of interest and its growing social casino market share with the possibility to expand into the $20B casual genres could open opportunities to drive additional value through “leveraging its expertise in engagement and monetization.”

“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.”

Barry Cottle, President and CEO, Scientific Games

Pursue Accretive Digital M&A

As part of its strategy to create shareholder value and with mounting debts in mind, SG started divesting assets. In September, SG announced a definitive agreement to sell its sports betting business, OpenBet, to Endeavor Group in a cash and stock transaction worth $1.2 billion.

A month later, Canadian investment firm Brookfield agreed to buy SG’s Lottery business for $6 billion, of which $5.8 billion will be paid upfront and the remaining part over two years following the transaction close. Both transactions are on track to close in the second quarter of 2022.

Besides de-levering its balance sheet, SG continued to invest in its core business and pursue accretive digital M&A opportunities that would accelerate growth. Last month, SG announced a deal to acquire the provider of premium live casino solutions Authentic Gaming, enter the Live Casino market and expand its premium product portfolio.

Earlier this month, SG added ELK Studios to its production capacity in a deal that would allow SG to acquire the Swedish-based studio’s proprietary content and scale it across key markets, including the United States and Canada.