Billionaire Ronald Perelman, the largest shareholder in gaming equipment provider Scientific Games is exploring a possible sale of his 39% stake in the Las Vegas-based company, according to a filing with the Securities and Exchange Commission Wednesday.
The 13F document, filed by Perelman’s MacAndrews & Forbes Holding Co., stated the investor and businessman was exploring a possible sale of his more than 36.8 million shares in Scientific Games. Perelman serves as the company’s chairman. Bloomberg News calculated the stock value at $1.5 billion.
According to the filing, Perelman has “not formulated any specific or definitive plan or proposal” and “there can be no assurance that any transaction will occur or as to the terms of any such transaction.”
Perelman, 77, who is currently ranked No. 63 on the Forbes Magazine list of billionaires with a net worth of $7.5 billion, has built a fortune through investments in a variety of industries, including candy and cosmetics.
He has overseen Scientific Games’ rapid expansion as a gaming equipment provider starting in 2013 when the then lottery-centric company acquired slot machine developer WMS Industries for $1.3 billion. Two years later, Scientific Games bought Bally Technologies for $5.1 billion.
During that time, the company has been led by four different CEOs. Current CEO Barry Cottle has been in the position since 2018.
Shares of Scientific Games, traded on the Nasdaq, closed at $16.19, up 65 cents or 4,18%.
SunTrust Robinson gaming analyst Barry Jonas said in a research note the filing doesn’t appear to be specific to Scientific Games. MacAndrews & Forbes is exploring sales of its other holdings.
“In our view, MacAndrews appears to not be a forced seller on a tight timeline here and would likely look to maximize proceeds should they exit,” Jonas told investors.
According to Bloomberg, Perelman is looking to rework his holdings due to the coronavirus pandemic, which has disrupted the market place.
“Due to changes in the world both socially and economically, we have decided to reset MacAndrews & Forbes in a manner that will give us maximum flexibility both financially and personally,” company spokesman Josh Vlasto said in a statement to Bloomberg. “This will allow us to be opportunistic and flexible in looking at new situations.”
During 2018 and 2019, Perelman investment more than $40 million to increase his stake in Scientific Games, whose stock price collapsed in March along with the rest of the casino industry due to the coronavirus pandemic.
In March, Scientific Games furloughed an undisclosed number of employees, reduced pay and work hours for others, and sliced the salaries of executive leadership by 50%. Cottle gave up his entire salary. In April, the company said it had sliced costs by $100 million in the second quarter and drew down $480 million of its credit facilities, which was added to the $200 million in cash the company had on hand at the end of March. A new CFO was hired in May.
Scientific Games also made several key hires in the past year, including Matt Wilson as CEO of the gaming division. Recently, the company has been touting a line of cashless gaming products.
Howard Stutz is the executive editor of CDC Gaming. He can be reached at hstutz@cdcgaming.com. Follow @howardstutz on Twitter.
