Gaming briefs for June 16, 2003

Monday, June 16, 2003 | 11:33 a.m.

Aristocrat takeover interest reported

SYDNEY, Australia -- Geoffrey Ainsworth, a member of the Ainsworth family that owns 40 percent of Aristocrat Leisure Ltd., has been approached by people claiming to represent U.S. rival slot maker WMS Industries Inc. to discuss a takeover, the Australian Financial Review reported.

People claiming to represent WMS, which has a market value of $518 million, about twice the size of Aristocrat, approached Ainsworth to discuss a possible bid, he told the newspaper.

Taking over the Sydney-based slot maker would propel Waukegan, Ill.-based WMS to the second largest share of the U.S. and international slot markets, the paper said.

Shares of Aristocrat, which slumped 76 percent after the company cut its profit forecast for the third time since February because of a drop in sales, have rallied on speculation of a takeover offer. The stock has gained 24 percent since May 28 when it hit a five-year low of 89 Australian cents.

Ratings changed on gaming stocks

Shares of slot maker Alliance Gaming Corp. of Las Vegas have been upgraded by Deustche Bank Securities analyst Mark Falcone to "buy" from "hold" because of increased confidence in better-than-expected slot and systems sales over the next few quarters.

Continued growth in the installed base of "recurring revenue" games that Alliance shares with casinos also fueled the upgrade, Falcone said.

"Over the next few quarters, the Bally Gaming division could double the number of titles available for customers, as the regulatory bottleneck that slowed new game approvals is beginning to clear," Falcone said in a research note to investors today.

Separately, shares of Las Vegas casino equipment supplier Shuffle Master Inc. were downgraded by Wells Fargo analyst David Barteld from "buy" to "hold" as shares have recently achieved the analyst's pre-determined price target of $28 per share.

"We continue to have a great deal of confidence in the company's long-term business model, senior management and potential for new product initiatives and believe that the company is one of the most successful niche manufacturers of gaming equipment for the worldwide gaming industry," Barteld said in a research note today.

Shares of Shuffle Master have appreciated 48 percent year to date and 69 percent since their 2003 low in February, he said.

Trump joins list of potential British casino developers

LONDON -- Donald Trump is in talks to open a casino in London's West End, the Sunday Express of the U.K. reported, citing Trump.

The British government's plan to liberalize gaming industry laws has prompted Trump to team up with a U.K.-based developer to play a part in the redevelopment of Leicester Square's north side, the newspaper said.

"I would want something big and glamorous," Trump said, according to the Express. "I'd be surprised if I didn't do anything in England. Maybe some kind of combination -- a hotel with a casino perhaps."

Other possible sites for Trump include Blackpool, England, and the Trump Hotels & Casino Resorts Inc. chairman and chief executive officer is also believed to be considering opening a Las Vegas-style strip along the Thames Gateway to the east of London, the Express said. To accomplish this, Trump could join forces with friend and Harrods Department Store Co. owner Mohamed Al-Fayed, the paper said.

Other potential British casino operators include MGM MIRAGE of Las Vegas and a consortium comprising Gala Group Ltd., one of the U.K.'s biggest gaming companies, and Harrah's Entertainment Inc. of Las Vegas.