IGT stock soared late last week when Bloomberg reported that Apollo Global Management was interested in potential buying the company’s gaming division.
This follows an IGT announcement in June that it was considering “strategic alternatives” for its gaming division, as well as for Play Digital, its online gaming and sports betting component, hoping to unlock the full value of the IGT operations, although no timeline was included.
A sale could mean as much as $4 billion to $5 billion for IGT, which would retain its lottery division. Gaming and Play Digital accounted for $436 million in revenue for the first quarter of 2023.
When contacted by Reuters, IGT said, “We are still in the process of exploring strategic alternatives for our Global Gaming and PlayDigital segments and can’t comment on rumors or speculation.”
The IGT share price jumped more than 10 percent on the rumor, and year-to-date, IGT is up more than 45 percent. Analysts believe that even with these increases, IGT is still undervalued. With a market cap of just over $6 billion, even the $4 billion estimate for the gaming/digital divisions leaves IGT with an even more valuable lottery division, which is responsible for 75 percent of the company’s earnings.
The company was purchased by Lottomatica, an Italian lottery supplier that included GTECH as one of its brands, in 2015.
IGT slot machines are some of the most popular in the world and include the Wheel of Fortune, Megabucks, Ghostbusters, and the leading video poker games, along with groundbreaking cabinets and systems. The PlayDigital division includes leading iCasino games and sports betting systems.
Apollo has been active in the gaming industry for years, acquiring a bankrupt Caesars Entertainment from billionaire Carl Icahn and then flipping it to Eldorado Resorts. The company has been active in ownership of other gaming suppliers and currently operates the Venetian/Palazzo on the Las Vegas Strip.
