{"id":10416,"date":"2013-01-31T12:42:01","date_gmt":"2013-01-31T20:42:01","guid":{"rendered":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/?p=10416"},"modified":"2018-09-21T14:01:58","modified_gmt":"2018-09-21T22:01:58","slug":"merger-of-the-nerds-cosmo-picketed","status":"publish","type":"post","link":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/merger-of-the-nerds-cosmo-picketed\/","title":{"rendered":"Merger of the Nerds; Cosmo picketed"},"content":{"rendered":"

\"\"With 2013 shaping up as a good year for slot sales, Scientific Games<\/strong> has chosen this moment to pounce upon WMS Industries<\/strong>, one of the oldest, biggest and most-respected firms in the industry. SGMS shares promptly leapfrogged from $8.93 to $10.82 a share, then fell into a day-long swoon, settling back towards yesterday’s prices. WMS shares, however, went KA-CHING!<\/a> They rose 59%<\/a> from yesterday, nearing $25\/share as of this moment, albeit still almost 100% below where WMS traded in 2009-10, which look like halcyon years in retrospect. Unlike the extremely short-lived SGMS rally, the WMS one is holding its ground. The deal could set off a spasm of consolidation in the manufacturing segment<\/a> of the gaming industry, much like the one that occurred around the turn of the century.<\/p>\n

Perhaps the sudden “cardiac event”<\/strong> of Scientific Games stock reflects the shock of a company with a market capitalization of $800 million making a play for one of almost double the value: $1.4 billion in market cap. Scientific, which specializes in lottery-related products, hit bottom last August but has remained in a mostly downward trend from a \"\"year ago, when it hit $13\/share. As International Game Technology<\/strong> shares fell toward $15 today, the WMS takeover was a dispatch that embattled IGT CEO<\/a> Patti Hart<\/strong> didn’t need to hear. (Since Hart archnemesis Jason Ader<\/strong> is also a board member of Las Vegas Sands<\/strong>, one must wonder at the extent to which he may be acting as a catspaw of Sheldon Adelson<\/strong>, who’s trying to smother U.S. online gambling in the cradle.) However, she can point to WMS’ recent success in the social-gaming sphere to make the argument that IGT is presently undervalued.<\/p>\n

For $1.5 billion<\/strong> (including debt assumption) or $26\/share, Scientific buys itself greater respectability and a huge product line. Plurality owner Ron Perelman<\/strong> also got something of a bargain, paying 6X cash flow for WMS. Still, Deutsche Bank<\/strong> analyst Carlo Santarelli<\/strong> used terms like “rich” and “massive premium and risk,” and “somewhat daunting” to \"\"describe the deal. “On the positive side<\/em>,” he wrote, “the deal combines two companies in non-competitive business lines with significant trademark portfolios and content libraries which can cross pollinate<\/em>.” But he opined that neither company was “trending in the right direction” and was skeptical of the projected $110 million in consolidation-related savings, since there is little overlap between each company’s product line. He also was dismayed by Scientific’s “inability to generate meaningful cash flow and de-lever the business<\/em> ” which is unlikely to be relieved by any significant cash flow from WMS, inhibiting the growth of either firm. He dismissed the deal as a one-off and highly unlikely to spark a bidding war. Normally, this is the part of our program where we bring on J.P. Morgan<\/strong>‘s Joseph Greff<\/strong> for a contrasting view, but so far he hasn’t said “boo” about the deal.<\/p>\n

\"\"The Cosmopolitan of Las Vegas<\/strong> needs more problems like CEO John Unwin<\/strong> (left<\/em>) needs a hole in his head but it’s got a new one: a picket line<\/a>. The Culinary Union<\/strong> is conducting “informational” picketing of the Cosmo today, to publicize the lack of a collective-bargaining agreement with the $4 billion, Deutsche Bank-owned casino. True, the Cosmo is financially strapped, but so are most of its rivals on the Las Vegas Strip<\/strong> and they’ve not required a year and a half to reach terms. What’s up with that, Cosmo?<\/p>\n

“Former power broker”<\/strong> (read<\/em>: super-sleazy industry operative) Harvey Whittemore<\/strong> won’t be going on trial until April<\/a>, at the earliest. He’s under indictment for allegedly violating campaign-finance laws to funnel money to the reelection of Sen. Harry Reid<\/strong> (D-NV). Old Sixty Votes has not been implicated in Whittemore’s supposed scheme, although he’s been known to do big favors for the strong-arming lobbyist in his time.<\/p>\n

What the hell’s the point<\/strong> of trying to ambush drunk drivers on Super Bowl<\/strong> Sunday, if you tell them where you’re going to be lying in wait? (Near Boulder Station<\/strong>, if you simply must know.) For that matter, given the hair-raising recklessness I see on a daily basis — just getting to and from work means gambling with your life — how’s Las Vegas Metro<\/strong> going to distinguish drunk driving from everyday idiocy?<\/p>\n","protected":false},"excerpt":{"rendered":"

With 2013 shaping up as a good year for slot sales, Scientific Games has chosen this moment to pounce upon WMS Industries, one of the oldest, biggest and most-respected firms in the industry. SGMS shares promptly leapfrogged from $8.93 to … Continue reading →<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[66,151,28,52,29,37,33,160,12,57,9,38,89],"tags":[],"_links":{"self":[{"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/posts\/10416"}],"collection":[{"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/comments?post=10416"}],"version-history":[{"count":9,"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/posts\/10416\/revisions"}],"predecessor-version":[{"id":22509,"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/posts\/10416\/revisions\/22509"}],"wp:attachment":[{"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/media?parent=10416"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/categories?post=10416"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/tags?post=10416"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}