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What: Shares of International Game Technology (NYSE:IGT) were hitting the jackpot today, jumping as much as 10% after the company agreed to be sold to Italy's GTECH for $4.7 billion.
So what: The slot machine operator will receive $13.69 in cash per share and 0.1819 shares of the new company to be formed. IGT's market value hovered near $4.2 billion today, and the stock has gained nearly 40% since talks of a deal first emerged in June. As part of the agreement, GTECH will assume IGT's $1.7 billion in net debt, and the new company will have leading positions in a number of different gaming segments, as GTECH runs lotteries in Italy and several U.S. states.
Now what: The new company will be domiciled in the U.K to take advantage of lower corporate taxes, and the companies expect the deal to result in $280 million in annual cost savings. For IGT, the merger was a result of exploring strategic options, and CEO Patti Hart said she was "extremely pleased" with the deal. IGT shareholders will receive a value of $18.25 a share from the deal, meaning the stock could easily move higher as long as no changes are made to the agreement.
Jeremy Bowman has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.