SciPlay shares tanked 20% on Thursday morning: explore why
Shares of SciPlay Corp (NASDAQ: SCPL) are down roughly 20% this morning after Scientific Games Corp (NASDAQ: SGMS) withdrew from its pending deal with the digital gaming company.
Scientific Games owns 81% of SciPlay
Scientific Games on Wednesday said it no longer plans on buying the remaining 19% of SciPlay that it doesn’t own. In the press release, CEO Barry Cottle said:
In line with our approach to capital management and disciplined merger and acquisition, we have decided that continuing to pursue this opportunity would not be prudent for our shareholders at this time.
The gambling products and services company will continue to own 81% of SciPlay that gives it a voting interest of 98%. Scientific Games, however, reiterated its commitment to investing in digital gaming in line with its long-term goal of becoming an industry leader.
Scientific Games is offloading two of its businesses
Scientific Games had first announced plans of acquiring the remainder of SciPlay in July. If completed, the deal would have switched each share of SciPlay with 0.25 shares of Scientific Games for the stockholders.
Scientific Games is currently in the process of offloading its lottery and sports betting business as well. The former will go to Brookfield Business Partners LP for $6.05 billion, and the latter will be sold to Endeavor Group Holdings Inc for about $1.20 billion.
Both deals, Scientific Games said, are likely to complete next year in the second quarter. The news comes a month after the U.S. company headquartered in Nevada bought Authentic Gaming Ltd – a Malta-based iGaming player that provides live casino products. SGMS is up more than 5.0% on Wednesday.
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