Anchor, IGT win OK for merger

Monday, Dec. 17, 2001 | 10:49 a.m.

International Game Technology of Reno and Anchor Gaming announced Friday that the Federal Trade Commission has given their merger its approval, clearing the way for the $1.4 billion deal to close by January 2002.

IGT's buyout of Las Vegas-based Anchor, first announced July 9, was delayed in late August when the FTC asked for more information about the the deal. The move indefinitely extended the deal's "waiting period," which is mandated under federal anti-trust law, and raised some speculation that the FTC had anti-trust concerns.

On Friday the companies jointly announced the FTC had terminated the waiting period, without elaborating.

"That (the FTC review) was obviously the biggest hurdle," said Anchor spokesman Howard Stutz.

With federal approval received, Anchor and IGT shareholders will meet separately Tuesday to vote on the merger. If approvals are received, Anchor and IGT plan to go before the Nevada Gaming Control Board and Nevada Gaming Commission in a special meeting this week to ask for their approvals.

Though the companies stated the companies hoped to close the deal by January 2002, the approvals of shareholders and Nevada gaming regulators would clear the way for the merger to close by year's end.

"We are hopeful to get it done by the end of December," Stutz said.

The other major hurdle to the deal was a "collar" inserted into the acquisition agreement. Had IGT's stock traded at an average price below $50 per share during the 20 business days prior to Tuesday's shareholder meetings, Anchor would have had the right to pull out of the deal, or demand more stock from IGT.

But this collar will not stop the IGT-Anchor deal, since IGT's stock has not traded below $50 per share since late October. IGT closed Friday at $64.85.

The deal calls for IGT to swap its stock for Anchor stock one-for-one, and to assume $430 million in Anchor debt. At Friday's closing price, the deal is valued at just under $1.4 billion.