Shares of slot machine-maker International Game Technology spiked more than 9 percent to around $17 Wednesday after news of the gaming company’s takeover by Italian gaming company Gtech.
The deal, valued at $18.25 per IGT share, will combine the two companies into a newly created global gaming conglomerate based out of the United Kingdom. By combining forces, Gtech and IGT would ideally be able to circumvent slowing growth in the sector.
Gtech is paying $13.69 in cash plus 0.1819 shares in the new holding company. The total transaction value, which includes IGT debt, is around $6.4 billion.
The GTech-IGT merger adds up to a gaming company that has “superior financial strength, with over $6 billion in revenues and more than $2 billion in EBITDA,” Gtech CEO Marco Sala told analysts on a call Wednesday.
“I think that offer is way too low. We shareholders need to vote NO and demand $22 at a minimum,” StockTwits user buickstyl wrote on the financial social network.
The message echoes that of law firm Rigrodsky & Long, P.A., which alleged Wednesday that IGT did not secure an adequate price and announced that the firm would initiate an investigation of the deal.
The merger highlights continued consolidation in the gaming sector and marks the second $1-billion deal in July. Earlier in the month, Australia’s Aristocrat Leisure’s agreed to pay $1.28 billion in cash for US slot machine manufacturer Video Gaming Technologies.