IGT Jumps Most Since 2009 on Report Company Seeking SaleChristopher Palmeri
International Game Technology, the world’s largest maker of slot machines, jumped the most in five years after Reuters reported the company has hired Morgan Stanley to assess a sale of the business.
The shares rose 14 percent to $14.31 at the close in New York today, the biggest one-day gain since April 3, 2009. The stock had fallen 31 percent this year through June 6.
The Las Vegas-based company has been exploring a sale for two months, hosting management presentations for would-be buyers, Reuters reported, citing people familiar with the matter. Potential acquirers include other gambling companies and private equity firms, the newswire said.
Like many businesses focused on the U.S. casino market, IGT has struggled as consumers continue to hold back on spending. The company reported on April 22 that its second-quarter revenue fell 15 percent to $512.8 million, due to weak sales of slot machines and slow spending by consumers on devices it leases to casinos. Net income fell 67 percent to $25.7 million.
Susan Cartwright, a spokeswoman for IGT, said the company had no specific comment on the report.
“As the industry leader, in a market that has been consolidating, it is not unusual for IGT to be a topic of speculation,” she said in an e-mail.
IGT could be sold for more than $20 a share, according to Steven Wieczynski, an analyst at Stifel Nicolas & Co., who has a buy rating on the shares.
“We still view a PE bid as most likely,” he said in a research note today. Other possible suitors include international gambling machine-makers with the balance sheet capacity and desire to expand in North America, such as Gtech SpA or Konami Corp., Wieczynski said.