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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.