International Game Technology (IGT) made its name as America’s premiere manufacturer of slot machines. Under new management during the past three years, the company’s focus has emphasized social gaming in what many believe will be the future of the industry.
Analysts have criticized some recent IGT social gaming acquisitions while investors have decried the company’s share price weakness.
Targeting the company’s management, an investment group, headed by well-known former gaming analyst Jason Ader, who represents, among others, Chuck Mathewson, former chairman of IGT’s board of directors, has advised the Securities & Exchange Commission that the group, Ader Investment Management LP, will support the election bid of three new members to the IGT board.
The group reportedly represents slightly more than 8 million IGTshares.
Being nominated as directors by the group are Mathewson, Ader-associate Daniel B. Silver, and former insurance industry executive Raymond J. Brooks.
It was during the years that Mathewson chaired the board between 1986 and 2003 that IGT held its dominant position among gaming machine manufacturers. Mathewson served as chairman emeritus of the company until 2010.
The dissidents claim the current management is responsible for the decline in share price, making the company considerably undervalued.
On Monday, the company, through CEO Patti Hart, sent letters to shareholders strongly urging they re-elect the existing board members that were described as “highly qualified and experienced.” The board is headed by former Harrah’s (now Caesars) CEO Phil Satre and includes former Nevada Gov. Bob Miller.
“Over the past three years,” the company said in its letter, “IGT’s Board of Directors and management team have successfully charted a course for the company that is both strategically and financially sound. As a result, IGT’s financial performance has improved, and significant capital has been returned directly to shareholders. Today, the company is positioned for sustained growth through continued investment in its core electronic gaming business and disciplined investments in related business opportunities and new markets.”
Investment groups are the principal owners of the company’s stock. These are led by Vanguard Group with 16 million shares; Jennison Associates LLC, 12.8 million shares, and State Street Corp., 11 million shares.
No date has been set for the 2013 shareholders meeting.
Ray Poirier is the longtime executive editor at GamingToday.
Contact Ray at [email protected].