IGT/SLOT prepare to merge; share prices rise

Dec 18, 2001 6:48 AM

With federal regulators out of the way, investors couldn’t wait Monday to jump all over the shares of International Game Technology (IGT) and Anchor Gaming (SLOT) whose firms will merge within the next few weeks.

Shareholders of both companies will meet today to approve the merger now that the Federal Trade Commission has terminated its review under the Hart-Scott-Rodino Antitrust Improvements Act.

Monday, IGT shares opened at $64.85 but by mid-day the price per share had been pushed up to $67.24, a 52-week high. By the end of trading, with more than two million shares changing hands, IGT was quoted at $66.85, up $2 for the day.

It was much the same for SLOT whose shares will be swapped one-for-one with IGT once the merger is completed. Shares of SLOT reached $67.28, up $2.69 by mid-day and finished at $66.67, up $2.08 on trading of more than 838,000 shares.

Hot products

Buoyed by the prospects of growth, smaller gaming companies watched the price of their stocks rise during the past two weeks.

Most notable was Penn National Gaming Corp. (PENN) whose shares on Monday reached $29.01 per share. Quite a move up from its 52-week low of $8.00. Impressing both analysts and investors were the company’s prospects with its “racino” in West Virginia, as well as its casinos in Mississippi.

Also catching the attention of investors were MTG Gaming Group (MNTG), and Ameristar Gaming (ASCA), whose growth prospects have been listed by Wall Street analysts.

MNTG was up about 10% on Monday, closing at $14.94, an increase of $1.44 for the day while ASCA, whose public offering of an aggregate of 6.9 million shares at $20.50 per share was closed Monday, saw its shares rise to $$22.65 during Monday’s trading.

The news was not so good for the shareholders of Mandalay Resort Group (MBG) whose management said in an SEC filing that it expected earnings to fall more steeply during the current quarter that ends on Jan. 31, 2002.

The company said it now expects to report a net loss per share in the double digit range. This was even worse than the forecasts of gaming analysts polled by Zacks Data Service. They said that among the 12 analysts following the stock the average loss was expected to be $0.06 with estimates ranging from minus $0.02 to minus $0.10.

MGB closed Monday at an even $22.

Record year

Shuffle Master Inc. (SHFL) closed its fiscal year 2001 with record revenues, net income and earnings per share.

For the 12 months that ended on Oct. 31, the company said it had revenues of $48 million, up from $38.9 million in fiscal 2000. Net income was $11.6 million, compared to $8.5 million and earnings per diluted share of $0.63, a 25% increase over last year’s $0.50 a share.

Dr. Mark Yoseloff, president and CEO of the company, said he was “particularly pleased with the progress of our table games business and the progress made in slot games. As we indicated, we are looking for similar total year revenue and earnings increases in fiscal 2002, and even greater diversification of revenues and market opportunities.”

Flat slot revenues

Revenues to the state of Connecticut for its share of slots play at the state’s two Indian casinos were flat for the month of November.

The Manshantucket Pequot’s Foxwoods Resort Casino reported revenue of $63.1 million, down from October’s $63.3 million while the Mohegan Sun Casino posted revenues of $57.1 million.

The state’s 25% share amounted to $15.8 million from Foxwoods and $14.3 million from Mohegan Sun.

At the two casinos combines, there are 12,653 slot machines in play.

The Insider

The highly-successful Argosy Gaming wants to insure that the success is long-term so they are proposing the addition of a bigger hotel and more attractions at the company’s riverboat in Lawrenceburg, Ind.

Visitor volume in Las Vegas during the month of October was down 7.9%, according to numbers released by the Las Vegas Convention and Visitors Authority. Total volume fell from 3.1 million to 2.9 million. Earlier, the state announced that the gaming revenue for Clark County was off 6.1% at $613.3 million.

Two Wall Street firms ”” Bear Stearns and Merrill Lynch ”” have boosted their earnings estimates for Harrah’s Entertainment Inc. (HET). Jason Ader of Bear Stearns raised his fourth quarter earnings estimate to $0.35 while David Anders of Merrill Lynch raised his estimate to $0.37.

Isle of Capri (ISLE) reported 5,300 visitors per day were recorded at Missouri’s newest riverboat in Boonville. They said the number exceeded their expectations.

Park Place Entertainment has signed an agreement with Cox Cable to install digital video and audio connections to 27,000 guest rooms.