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Tom Baker, who oversaw the transformation of International Game Technology into the industry's dominant slot machine manufacturer and supplier, will step down as chairman of the board, effective March 1, IGT announced Friday.
No replacement was named but IGT said a successor would be announced "at or before" the company's annual shareholder meeting, when Baker's resignation takes effect.
Most speculation about a new chairman centered on 38-year-old TJ Matthews, IGT's president and chief executive officer, who assumed the day-to-day leadership of the company in October 2003, when Baker, 61, was named chairman.
"TJ would be the logical choice, but he does have plenty on his plate," Jeffries & Co. gaming analyst Aimee Marcel said. "The major decisions over the past year have been made by TJ, so he would seem to be the person best qualified."
Daniel Davila, an analyst with Sterne, Agee & Leach, said the executive transition plan for IGT was put into motion following the company's purchase of Anchor Gaming in 2001. Matthews had been Anchor's chairman and CEO at the time of the merger.
"TJ was probably one of the reasons they did that deal," Davila said. "He's young and extremely talented. When you look at the IGT board of directors, he's probably the most visible person there, so conventional wisdom on the street would suggest he's the person."
Marc Falcone of Deutsche Bank said Baker's resignation, while expected at some point, came as a surprise, since he had been working on the international side on IGT's behalf. He added that Matthews "fits the tradition" of the IGT chairman.
"TJ has been an outstanding CEO and there's no question he would be an outstanding chairman," Falcone said.
During Baker's 16-year stint with IGT -- a career in which he held numerous positions at various times, including CEO, chief operating officer, chief financial officer and treasurer, -- IGT grew into a gaming industry behemoth, placing slot machines in more than 250 jurisdictions under numerous titles reflecting pop culture, such as "Wheel of Fortune," "Austin Powers," and the "Beverly Hillbillies." Industry estimates place IGT's overall domestic market share at more than 70 percent.
IGT purchased several competitors while Baker was company CEO, including Anchor Gaming, Sodak Gaming, Acres Gaming, Silicon Gaming and Tenacom. IGT also bought Shuffle Master Gaming's slot machine business, and got the company listed on the Standard & Poor's 500 index.
Baker became chairman of the board in October 2003 upon the retirement of Chuck Mathewson, who was named chairman emeritus. He is leaving the company to "pursue other interests," a company statement said.
"I accomplished the career goals that I set for myself at IGT," Baker said. "I am confident that I am leaving the company in excellent hands."
IGT employs more than 5,000 people worldwide and 3,440 workers in Nevada -- 2,686 at its corporate headquarters in Reno and 754 at its offices in Las Vegas. In fiscal 2004, IGT reported sales of 159,200 units and revenues of $1.3 billion.
IGT shares fell 58 cents, or 1.63 percent, Friday to close at $35.03.
The company said in August it will construct a new 600,000-square-foot building near Buffalo Drive and Sunset Road. That building, which is scheduled to open in fall 2006, will replace nine separate IGT sites in Southern Nevada, though the company does not plan to adjust its local work force.
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