The financial impact of the global pandemic has been astounding and now that most of the panic has subsided those realities are coming home to roost. Even the uber-wealthy it seems are were not immune to the devastation the virus wreaked on the economy.
Billionaire businessman and investor, Ron Perelman, has announced his intent to sell off his total holdings in online and land-based gambling supplier Scientific Games.
Cash Is Always King
While it is fantastic to grow a share-based wealth portfolio the real measure of anyone’s financial strength is their ability to turn that portfolio into real cash.
Perelman has agreed to sell his 34.9% stake in Scientific Games to unnamed consortium represented by Sydney based investment management firm Caledonia. The deal sets the value of the stock at $28 per unit, which should see Perelman walk away from the table with as much as $900 million.
These are not the first of Perelman’s assets to go up for sale in recent months. In order to protect his more leveraged interests, such as Revlon and Vericast, the 77-year-old billionaire has sold off paintings by Joan Miró and Henri Matisse, exited his position in Humvee jeep maker AM General for a cool $1 billion and is currently on the hunt for additional divestiture opportunities.
Is Scientific Games in Trouble?
It is certainly true that the casino game provider has seen its own fortunes tumble of late, as it was especially hard hit by the closure of Las Vegas during the pandemic, the future looks bright for Scientific Games.
Caledonia is not new to the world of gambling, already owning more than 10% of the Flutter entertainment which sports such brands as Paddy Power and Sky Bet. As the first step of breathing new life into Scientific Games former CEO of Aristocrat, Jamie Odell, and former Aristocrat CFO, Toni Korsanos, is now the Board’s new executive chair and executive vice chair, respectively.
Scientific Games president and CEO, Barry Cottle, said:
“Scientific Games is well-positioned for future success given our industry-leading portfolio of products and technologies, loyal customer base and talented leadership team. We are pleased to have the support of our refreshed Board and new investor base as we continue to execute on our strategy to drive meaningful long-term growth and shareholder value creation.”
It is reported that Caledonia will be looking for opportunities to leverage the online betting and online casino space more effectively in the short to medium term allowing the company to be financially stable while the land-based gambling industry settles into whatever its new normal may become.