Two of the top bosses of International Game Technology (IGT) made a surprise trip to Australia, igniting rumors that one of the world’s biggest gaming companies is eyeing to buy Tatts Group’s lotteries business.
Australian Financial Review reported that IGT chief executive Marco Sala and the chief of IGT’s international business, Walter Bugno, in and around Sydney but it isn’t clear why the two executives are in the Land Down Under.
Some industry observers believe that it has something to do with the possible sale of Tatts Group’s lotteries business. They think that Sala will not waste his time to fly in Australia if the concern is just a day to day business.
Tatts, which was acquired by Tabcorp Holdings Ltd. for US$4.9 billion in October, is reportedly considering the sale of the lotteries business separately. For the observers, the Tatts-Tabcorp deal is a sign for possible suitors to take one last look at the numbers.
The Monaco-based Bugno is, on the other hand, looking at ways to expand in Australia given that the gaming company’s share of the local pokie has dropped to 15 percent in recent years from 25 percent. Adding Tatts lotteries to the company’s portfolio will make Bugno’s wish for IGT to increase those numbers.
The Observers believe that IGT, which has an extensive lotteries services division, may possibly have a greater chance to snag Tatt’s lotteries business once the Tatt-Tabcorp deal has been settled due to Bugno’s connections in Tabcorp.
Bugno was a former chief executive of Tabcorp, who had been instrumental in convincing the gaming firm’s consecutive board to commit for the redevelopment of The Star Entertainment Group.
The question now lies whether the Tatts board could take a cash bid for part of the business over a cash and scrip deal for all of the business? This is the possible dilemma that the Tatts board may face, particularly when putting the lotteries division on sale.
According to the gaming observers, the offer will expose the beleaguered gambling business from more pressure.
