Scientific Games (NASDAQ:SGMS) Chairman Ron Perelman is going to sell his 39 percent stake in the Las Vegas-based gaming equipment manufacturer to Australia’s Caledonia, an investment management company, and other institutional investors for about $1 billion, the company announced on Monday.
Perelman owns about 36.8 million shares in the company. Last September, he upped his ownership when purchasing 230,000 additional shares.
The deal is based on a purchase price of $28 a share. Shares in Scientific Games were selling for $18.97 as of the close of the Nasdaq on Friday.
The stock jumped in price on Monday by as much as 51.7 percent, as rumors and later confirmation of the pending sale were reported. As of 10:06 am ET, company shares were selling for $27.77.
Perelman’s sale of his shares was expected. In July, he announced he was considering selling his stock. His shares are owned by Perelman’s company, MacAndrews & Forbes Holdings Ltd. Two MacAndrews & Forbes representatives who were on the Scientific Games board will step down, as will Perelman.
Ex-CEO at Aristocrat Becomes New Scientific Games Chair
Scientific Games also announced that Jamie Odell will become the new board chair. Odell was Aristocrat Leisure’s CEO between 2009 and 2017.
Last year, Odell was named an advisor to Perelman and other officials at Scientific Games, including CEO and President Barry Cottle. Odell gave advice on industry trends, market innovation, and growth strategies, according to a company statement.
Odell said Scientific Games “possesses … a differentiated position in the emerging digital gaming and sports betting industries,” the statement adds. By including the fields in the announcement, some industry analysts speculated these could become focuses for Scientific Games going forward.
Toni Korsanos is the new vice chair. Korsanos is Aristocrat’s ex-chief financial officer. A third new board member will be named.
The Financial Times reported Perelman has been trying to sell off some of his investments due to the impact the coronavirus pandemic has had on his companies. In August, Perelman, 77, told Vanity Fair he wants a “less complicated and less leveraged business life.”
In July, Perelman sold a 70 percent stake in Humvee maker AM General. In recent weeks, word came that he was considering unloading a 57-acre estate in New York’s Hamptons for about $180 million, the New York Post reported.
He apparently also wants to sell more of his valuable art collection. He sold two paintings by artists Joan Miro and Henri Matisse for about $37 million in July at an auction held at Sotheby’s London.
The downsizing comes as Perelman’s net worth dropped, news reports reveal. It once totaled close to $20 billion, the Bloomberg Billionaire’s Index reported. Now, it is estimated at between $6.2 and $7.8 billion. He was listed recently as the 79th wealthiest person in the US.
Caledonia Part Owner of Gaming Businesses
Caledonia is experienced with the gaming business. It already owns over 10 percent in Flutter Entertainment.
Flutter’s assets include Ireland-based Paddy Power, a bookmaker with a strong online presence, and in Australia, market-leading online sports betting brand, Sportsbet.
Recently, Flutter merged with The Stars Group in a $12 billion deal. Stars operates PokerStars, the world’s largest online poker site.
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