Zona de Azar USA – SciPlay Stock Surges as Light & Wonder Proposes Acquisition of Remaining Equity
USA.- May 19th 2023 www.zonadeazar.com Light & Wonder Thursday announced the company has submitted a proposal to SciPlay to potentially acquire equity it doesn’t currently own own.
Per the letter, Light & Wonder would acquire the remaining 17% equity interest for $20 per share in an all-cash transaction valued at $422 million. SciPlay’s stock sharply rose over 25% to $19.58 as of 2pm Eastern time after the proposal was announced. If the transaction is approved, SciPlay will become a wholly own subsidiary of Light & Wonder.
The letter, signed by Light & Wonder CEO and President Matthew Wilson states that “the proposed consideration would imply an enterprise value of $2.1 billion for SciPlay and a premium of 28.5% based on the SciPlay closing stock price as of the close of business on May 17, 2023, the last trading day prior to the proposal.
“The proposed transaction offers SciPlay’s public shareholders a compelling combination of value, speed and certainty. SciPlay’s public shareholders would receive an immediate and certain premium value for their shares in cash, obtaining liquidity and de-risking their investment in a volatile and uncertain market.”
According to a release, by acquiring the remaining interest in SciPlay, Light & Wonder would unify its business, “enabling seamless collaboration with SciPlay that will add further momentum to the company’s already robust cross-platform strategy.” The transaction also will combine Light & Wonder and SciPlay balance sheets, “providing flexibility to invest cash across the enterprise where it will best drive shareholder value.”
L&W owns approximately 83% of the economic interest and 98% of the voting interest in SciPlay. The letter states that “in our capacity as a shareholder of SciPlay, we are interested only in the transaction specified above with respect to the publicly traded shares of SciPlay and intend to vote in favor of such transaction. We would not expect, in our capacity as a shareholder of SciPlay, to vote in favor of any alternative sale, merger or other corporate transaction involving SciPlay nor divest or sell any portion of our ownership interest.
“Please note that this proposal is an expression of interest only, and we reserve the right to withdraw or modify our proposal in any manner at any time. No legal obligation with respect to the Transaction or any other transaction shall arise unless and until execution of a definitive merger agreement between Light & Wonder and SciPlay.”
Truist Securities analyst Barry Jonas wrote in a note that a deal could help simplify Light & Wonder’s story ahead of its Australian Securities Exchange dual listing, “which is moving faster than our initial expectations (should be effective May 21, 9 p.m. EDT).”
Jonas noted that the deal could be additive for a few reasons:
1. Light & Wonder management will have full access to SciPlay’s cash ($358M as of Q1 end).
2. The deal solves for the restricted use of proceeds from the sale of Light & Wonder’s sports division sold to Endeavor for $800 million 9/22, where share repurchases were excluded.
3. Lead to some cost synergies (e.g., public company costs, some administrative costs).
4) Better align Light & Wonders’ operating divisions from a strategic sense (though we note Light & Wonder presently controls SciPlay regardless).
Edited by: @MaiaDigital www.zonadeazar.com
