WMS Offers Stock For Bally Gaming
CHICAGO (AP) _ Bally Gaming International Inc. may be low on cash, but its wealth of experience in slot machine marketing has made it a takeover target.
Bally Gaming on Tuesday announced an agreement in principle to be acquired by competitor WMS Industries Inc. for stock worth about $124 million.
Chicago-based WMS would benefit from Bally Gaming’s marketing experience and extensive distribution system, an analyst said.
Las Vegas-based Bally Gaming has suffered from quality problems in recent years and, more recently, from publicity about its role as the apparent victim of an alleged fraud scheme in Louisiana.
Bally Gaming shareholders would receive six-tenths of a share of WMS stock for each share of Bally Gaming owned, according to the agreement in principle.
That amounts to $11.85 per share at WMS’s closing stock price Tuesday of $19.75, for a total of $124.4 million for all of Bally Gaming’s 10.5 million shares.
WMS said it might offer more pending the outcome of its examination of Bally Gaming’s books over the next 25 days.
Bally Gaming’s stock rose $1.75 to $10.25 a share Tuesday. It has been trading well below its 52-week high of $16.12 1/2 since the Louisiana investigation news broke last winter.
Bally Gaming, a 1992 spinoff of Bally Entertainment Corp., earned $3.8 million on sales of $236 million last year, an improvement over its loss of $23.4 million on sales of $168.7 million in 1993.
``We have turned the company around from a product standpoint and have very competitive products, but we don’t have a lot of cash. We think this combination will benefit both parties,″ spokesman Neil Jenkins said.
WMS, with roots in pinball and video games, has developed a well-received line of slot machines but lacks marketing and distribution experience, said Kevin Dukesherer of Kemper Securities Inc. in Chicago.
WMS earned $28.4 million on sales of $358.2 million in the fiscal year ended June 30.
Bally Gaming has been snarled in a racketeering case in New Orleans in which prosecutors say the company was the victim of an alleged fraud scheme to infiltrate Louisiana’s video poker industry.