(Updates sourcing, share price)
By Mike Stone
June 25 Aristocrat Leisure Ltd, an
Australian gaming company, said on Wednesday it was in advanced
talks to purchase U.S. competitor Video Gaming Technologies Inc.
A deal for Franklin, Tennessee-based Video Gaming
Technologies (VGT), which makes slot machines primarily for
Native-American casinos, could be valued at about $1 billion,
said people familiar with the talks, who asked not to be named
because the matter is private.
That price tag would be a big bite for Aristocrat, which had
a market cap of over $2.82 billion at Tuesday's close, before
Aristocrat issued a statement confirming the talks, citing
media speculation in response to Reuters' requests for comment.
Aristocrat dropped 2.5 percent in Australian trading on
While VGT has been for sale on and off for years, the two
companies have been in talks in recent months, said the sources.
The talks could fall apart at any moment, the sources cautioned.
A successful deal would be a significant step for Aristocrat
as it continues to expand in the U.S. gaming market.
Makers of slot machines, known broadly as gaming equipment
makers, are questioning their relevance as they face an aging
population of users. Many are looking to Internet-based gaming
as an option for growth in new, younger-demographic markets.
As companies look for more users on the internet and mobile
devices, consolidation has begun, as evidenced by two mergers
last year. Bally Technologies Inc purchased SHFL
Entertainment Inc, and Scientific Games Corp purchased
WMS Industries Inc.
Another gaming equipment maker, International Game
Technology, is exploring a sale, as previously reported
(Reporting by Mike Stone; Editing by Meredith Mazzilli and