Current Report — Form 8-K Filing Table of Contents
Document/ExhibitDescriptionPagesSize
1: 8-K Gtech Holdings Corporation Form 8-K HTML 49K
2: EX-2.1 Agreement and Plan of Merger HTML 490K
3: EX-10.1 Agreement HTML 29K
4: EX-10.2 Supplementary Agreement to Master Agreement of HTML 53K
December 5, 2004
5: EX-10.3 2nd Supplementary Agreement to Purchase Agreement HTML 42K
of December 5, 2004
6: EX-99.1 Press Release HTML 46K
LOTTOMATICA
AGREES TO ACQUIRE GTECH HOLDINGS TO CREATE LEADING GAMING SOLUTIONS
COMPANY
GTECH
Shareholders to Receive $35.00 Per Share in Cash
Transaction
Supported by De Agostini S.p.A, Majority Shareholder of
Lottomatica
Lottomatica
will Partially Fund the Transaction through a Rights Issue and Issuance of
Non
Convertible Subordinated Securities
W.
Bruce Turner of GTECH Expected to Become CEO of the New Lottomatica Group;
Rosario Bifulco to Relinquish Management Roles Upon Completion of
Transaction
NOVARA
and ROME, ITALY and WEST GREENWICH, RHODE ISLAND, USA - January 10, 2006 -
Lottomatica S.p.A. (Milan: LTO), the exclusive license holder and operator
of
Italy’s Lotto, one of the world’s largest lotteries; De Agostini S.p.A., a
privately held Italian diversified industrial and financial holding group that
is Lottomatica’s majority shareholder; and GTECH Holdings Corporation (NYSE:
GTK), a leading provider of gaming technology and services, today announced
that
Lottomatica and GTECH have entered into an agreement pursuant to which
Lottomatica will acquire GTECH for $35.00 in cash per outstanding GTECH
share.
1
The
transaction will create one of the world’s leading gaming solutions providers,
with significant global market presence and the broadest portfolio of lottery
technology, services, and content solutions. The combined company will have
operations in over 50 countries worldwide and approximately 6,300 employees.
The
combined consensus estimates of 2005 revenues and EBITDA for the combined
company would be €1.6 billion ($1.9 billion) and €0.7 billion ($0.84 billion),
respectively. In its fiscal year ended February 26, 2005, GTECH reported
revenues and net income of $1,257 million and $196 million,
respectively.
Under
the
terms of the agreement, which was approved by the boards of directors of both
Lottomatica and GTECH, Lottomatica will acquire all of the outstanding shares
of
GTECH’s common stock. The $35.00 per share consideration represents a premium of
15% over the closing price of GTECH shares on September 9, 2005, the last
trading day before GTECH announced that its board of directors had decided
to
explore strategic alternatives for the company. GTECH currently has
approximately 132.8 million shares of common stock outstanding on a fully
diluted basis, including options and shares issuable upon conversion of
convertible debt. The total value of the transaction is approximately €4.0
billion ($4.8 billion), including the assumption of GTECH’s existing net debt.
The
acquisition will be effected by means of a “cash
merger”
of a
special purpose vehicle into GTECH as a result of which the shareholders of
GTECH will be entitled to receive the $35.00 per share in cash and the GTECH
shares shall be delisted.
Lottomatica
will fund the transaction through:
·
available
cash of €0.4 billion ($0.48 billion);
·
a
€1.4 billion ($1.7 billion) rights issue, expected to be voted upon
by
Lottomatica in April 2006 and launched in May
2006;
·
€0.75
billion ($0.9 billion) of non-convertible subordinated securities
expected
to be issued in May 2006;
·
the
proceeds of a €1.9 billion equivalent ($2.3 billion) senior loan, to be
extended to the special purpose vehicle to merge into GTECH at the
closing
of the transaction; the loan will be guaranteed by
Lottomatica
2
De
Agostini S.p.A. has agreed, subject to certain conditions, to exercise its
full,
direct and indirect, pro-rata share of the rights offering (€0.8 billion) ($1.0
billion). Credit Suisse First Boston (CSFB) and Goldman Sachs have agreed to
underwrite Lottomatica’s rights issue and subordinated securities and have
committed to provide the senior loan financing. The financings and related
underwritings and commitments are subject to Lottomatica maintaining a pro
forma
investment grade credit rating and other customary conditions. Furthermore,
De
Agostini and Lottomatica have agreed to enter into lock up undertakings
consistent with those provided for in similar market transactions. It is
expected that Lottomatica will maintain its investment-grade rating and that
the
new capital structure will have the flexibility to pay a dividend to
shareholders and make investments in growth opportunities.
The
subordinated securities, due 2066 (the statutory life of Lottomatica will
therefore be extended), will be listed on a European stock exchange, and will
be
offered to institutional investors.
Completion
of the transaction, which is expected to occur in mid-2006, is subject to
receipt of financing, approval by GTECH shareholders, regulatory approvals,
receipt of contract assignment assurance from certain significant lottery
customers, Lottomatica maintaining a pro forma investment grade credit rating,
and other customary conditions.
Following
completion of the transaction, GTECH will continue to operate as a separate
business unit within a newly formed Lottomatica group structure. The group
is to
be headquartered in Rome and GTECH will continue to be headquartered in Rhode
Island. The transaction is not expected to involve any substantial disruptions
to the workforces of either GTECH or Lottomatica due to minimal operational
and
geographic overlap.
As
previously planned, Rosario Bifulco, Chairman and CEO of Lottomatica, will
relinquish his executive roles after leading the company for four years through
a period of significant development. It is expected that at the closing of
the
transaction, and subject to the required approvals of the relevant regulatory
authorities under the Italian Lotto concession:
3
·
W.
Bruce Turner, President and Chief Executive Officer of GTECH, will
be
proposed as a member of the Lottomatica board of directors and
will become
CEO of Lottomatica, while maintaining his position at
GTECH;
·
Marco
Sala, current General Manager of Lottomatica, will be proposed
as Managing
Director of Lottomatica with responsibility for Italian operations.
His
appointment will ensure continuity in the successful management
and
development of the Italian Lotto license and Lottomatica’s other
activities in Italy.
It
is
also expected that Jaymin Patel, Chief Financial Officer of GTECH, will become
CFO of Lottomatica upon completion of the transaction. GTECH’s other current
officers and management team are also expected to remain in their positions
with
GTECH. It is currently anticipated that independent directors from the United
States will be named to serve on the Board in due course.
It
is
expected that Mr. Turner, Mr. Patel and other members of GTECH’s management team
will invest a material portion of the proceeds from the sale of their GTECH
shares to acquire Lottomatica stock from Lottomatica at the price of the rights
offering. It is expected that Lottomatica’s stock option plans will be expanded
and extended to include members of GTECH’s management. Mr. Sala is also expected
to have an investment in Lottomatica.
“This
transaction is an extraordinary opportunity for --De Agostini,” said Mr. Lorenzo
Pellicioli, Chief Executive Officer of De Agostini S.p.A. “Since investing in
Lottomatica in 2002, we have looked for ways to assist the company in developing
an international footprint within the gaming industry. This merger enhances
the
long-term potential of our investment by creating a global gaming platform,
with
diverse revenue streams, quality customer relationships and leading-edge
technological capabilities. As we announce this transformational transaction,
I
would like to thank Rosario Bifulco, current Chairman and CEO of Lottomatica,
for his invaluable contribution to the development of the company over the
last
few years, and I look forward to his continued support of the company. We are
pleased to join forces with Bruce Turner and his team, which includes many
outstanding gaming industry executives, to build further both Lottomatica’s and
GTECH’s gaming platforms and competitive positions.”
4
Mr.
Bifulco commented, “With the acquisition of GTECH, Lottomatica caps a period of
successful development, transforming itself from a domestic company to a truly
international business. I believe this is a rare achievement for an Italian
enterprise. I am proud to have contributed to this process and to Lottomatica’s
operations. We have indisputably strengthened our business, and we have also
laid the foundations for the further creation of shareholder value as well
as a
high quality offering for our customers.”
“We
are
proud to partner with De Agostini and Lottomatica to create the largest global,
vertically integrated operator and solutions provider to the international
lottery market,” said Mr. Turner. “During the past several years we have firmly
established GTECH as the leading global lottery provider with strong positions
in gaming solutions and commercial services, with a commitment to integrity
and
customer service. At the same time, Lottomatica has successfully grown one
of
the world’s largest, most profitable and most complex lotteries. The combined
company will have considerable scale and financial strength, superior customer
solutions and significant long-term growth prospects.
“My
colleagues and I are pleased that the combined company will retain our existing
commitments to the Rhode Island community and that GTECH’s operations will
remain intact and poised for additional growth,” Mr. Turner
concluded.
“The
cash
consideration afforded to GTECH shareholders in the transaction provides
attractive value for the business,” added Robert M. Dewey, Jr., Chairman of the
Board of Directors of GTECH. “The combined company will benefit from the
experience and expertise of GTECH management and the dedication and commitment
of GTECH employees worldwide.”
Mr.
Sala
said, “The acquisition of GTECH further enhances our expertise, capabilities and
technologies, which will benefit our operations in Italy and in other markets
around the world. Our Italian team looks forward to sharing ideas and strategies
with our new colleagues, as we work together to strengthen the new Lottomatica’s
global leadership position.”
5
GTECH’s
Board of Directors has received separate opinions from Citigroup Global Markets
and Houlihan Lokey Howard & Zukin that the transaction is fair to GTECH
stockholders from a financial point of view. GTECH’s financial advisor is
Citigroup Global Markets, and its legal counsel is Cravath Swaine & Moore
LLP and Edwards Angell Palmer and Dodge LLP.
Lottomatica’s
financial advisor with respect to this transaction (with regard to rating
advisory and hybrid structuring) is Credit Suisse First Boston (Europe) Limited
(“CSFB”), and its legal counsel are Dewey Ballantine LLP and Bonelli Erede
Pappalardo. Shearman & Sterling LLP and Gianni, Origoni, Grippo &
Partners are the legal counsel for CSFB and Goldman Sachs in the transaction
(including with regards to financing). The Lottomatica Board has received from
CSFB and Goldman Sachs opinions with respect to the fairness to the company
from
a financial point of view of the consideration to be paid pursuant to the terms
of the transaction.
Revenues
and EBITDA for Lottomatica and GTECH have been presented on a combined basis
in
this document for illustrative purposes only and do not indicate the actual
combined revenues and EBITDA of the companies for the periods presented after
giving effect to the transaction. The combined numbers have been calculated
solely as the pure arithmetic sum of the I/B/E/S December 2005 estimates for
the
standalone revenues and EBITDA of Lottomatica and GTECH. In addition, for GTECH,
the December 2005 estimates are obtained by calendarising I/B/E/S estimates
for
February 2005 (2/12) and February 2006 (10/12).
The
combined numbers are presented solely to illustrate generally the overall scope
of the combined company, and should not be taken to represent how the companies
would have performed on a historical basis had their operations been combined
during the periods presented,
6
or
how
the companies will perform on a combined basis after giving effect to the
transactions. Moreover, the combined numbers do not reflect any pro
forma or
other
adjustments to reflect the combination or any adjustments to conform the
accounting principles of the two companies. Lottomatica reports its financial
information in accordance with IFRS, and GTECH reports its financial information
in accordance with United States generally accepted accounting principles.
EBITDA, as used in this document, means earnings before interest, taxes,
deprecation and amortization. For the foregoing reasons, such numbers are not
comparably determined and are presented herein only for illustrative
purposes.
About
Lottomatica
Lottomatica
S.p.A. operates one of the largest lotteries in the world, the Italian “Lotto,”
and is the market leader in the Italian gaming industry. Lottomatica has a
network of 44,000 lottery terminals and offers services through its three main
business segments - lotteries, sports games and betting, and commercial
services. The company, headquartered in Rome, has revenues of €585.8
million1 ,
over
1,000 employees and is publicly-traded on the Milan stock market (LTO). It
is
controlled by De Agostini, which owns 58% of the company’s share capital. For
more information about the company, please visit Lottomatica’s website at
http://www.lottomatica.it.
About
De Agostini
Privately
owned De Agostini is a leading Italian diversified industrial and financial
holding group, with significant international operations. In addition to the
investment in Lottomatica, it is mainly active in the insurance sector (through
65.5% owned Toro Assicurazioni, a leading Italian insurer, with 2004 revenues
of
€2,654 million), in free-to-air TV (19.7% of Antena 3, a leading Spanish
broadcaster, with 2004 revenues of €817 million) and in publishing (100% of De
Agostini Editore with 2004 revenues of €1,705 million and operations in about 30
countries worldwide). For more information about De Agostini, please visit
http://www.gruppodeagostini.it.
About
GTECH
GTECH
is
a leading gaming technology and services company. With more than $1.25 billion
in annual revenues and 5,300 people in over 50 countries, GTECH provides
integrated technology, creative content, and business services to effectively
manage and grow today’s evolving gaming markets. In targeted emerging economies,
GTECH also leverages its operational presence and infrastructure to supply
commercial transaction processing services. For more information about the
company, please visit GTECH’s website at http://www.gtech.com.
1
Year end
2004 restated accordingly with IAS/IFRS
principles
7
ADDITIONAL
INFORMATION
GTECH
will file a Form 8-K with the Securities and Exchange Commission (the “SEC”)
regarding the transaction, which will include a copy of the definitive
agreement. All parties desiring details regarding the conditions of this
transaction are urged to review the contents of the definitive agreement, which
is available at the SEC’s website at http://www.sec.gov/.
In
connection with the proposed merger, GTECH will file a proxy statement
and other
documents with the SEC. We urge shareholders to carefully read the proxy
statement and any other documents filed with the SEC when they become available
because they contain important information about GTECH, the proposed merger
and
related matters. A copy of the proxy statement will be sent to shareholders
seeking their approval of the proposed merger. Shareholders also will be
able to
obtain a copy of the proxy statement (when available) and other documents
filed
by GTECH free of charge at the SEC’s web site, http://www.sec.gov, or at the
SEC’s public reference room at 100 F Street, NE, Room 1580, Washington, D.C.
20549. In addition, documents filed by GTECH can be obtained by contacting
GTECH
at the following address and telephone number: GTECH Corporation, 55 Technology
Way, West Greenwich, Rhode Island02817, Attention: Investor Relations
Director,
Telephone: 401-392-1000, or from GTECH’s website, http://www.gtech.com/.
GTECH
and
its officers, directors and certain other employees may be soliciting proxies
from GTECH shareholders in favor of the proposed merger and may be deemed
to be
“participants in the solicitation” under the rules of the SEC. Information
regarding GTECH’s directors and executive officers is available in its proxy
statement filed with the SEC on June 24, 2005. Other information regarding
the
direct or indirect interests, by security holdings or otherwise, of the
participants in the solicitation will be set forth in the proxy statement
relating to the merger when it becomes available.
Statements
about the expected timing, completion, and effects of the proposed transaction
and all other statements in this release, other than historical facts,
constitute forward-looking statements within the meaning of the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995. Readers
are
cautioned not to place undue reliance on these forward-looking statements
and
any such forward-looking statements are qualified in their entirety by
reference
to the following cautionary statements. All forward-looking statements
speak
only as of the date hereof and are based on current expectations and involve
a
number of assumptions, risks, and uncertainties that could cause the actual
results to differ materially from such forward-looking statements. GTECH
and
Lottomatica may not be able to complete the proposed transaction on the
terms
described above, on other acceptable terms, or at all because of a number
of
factors, including the failure to obtain shareholder approval, the failure
of
Lottomatica to obtain financing, the failure to receive required assurances
from
certain significant lottery customers, Lottomatica maintaining a pro forma
investment grade credit rating, or the failure to satisfy the other closing
conditions. These factors, and other factors that may affect the business
or
financial results of GTECH, are described in GTECH’s filings with the SEC,
including Items 1 and 7 of GTECH’s annual report on Form 10-K for the fiscal
year ended February 26, 2005.
This
press release shall not constitute an offer to sell or a solicitation of an
offer to buy any securities, nor shall there be any sale of securities, in
any
state or jurisdiction in which such offer would be unlawful. No securities
referred to herein will registered under the U.S. Securities Act of 1933, as
amended, and therefore no such securities may be offered or sold in the United
States without registration or an applicable exemption from the registration
8
requirements
of the Securities Act.
No
securities referred to herein will be publicly offered in the United States.
This press release is not a solicitation of a proxy from any security holder
of
GTECH.
-000-
9
Dates Referenced Herein and Documents Incorporated by Reference
