Progressive Gaming again delays sale of games unit

LAS VEGAS, Nevada -- For the third time in less than a month, Las Vegas-based Progressive Gaming International Corp. extended the timetable for completing the sale of its table games division to Shuffle Master.

Wall Street, however, is getting antsy.

Originally, the deal, in which Las Vegas-based Shuffle Master would buy Progressive Gaming's table games for a yet to be disclosed price, had been scheduled to close Aug. 31. However, the date was extended twice, first to Sept. 7 and then to Monday. However, the transaction Monday was extended until Sept. 24.

Shuffle Master, which owns several popular table games, including Let It Ride and Three Card Poker, will pick up Caribbean Stud, one of the gaming industry's more popular table games, once the transaction is final.

CIBC World Markets gaming analyst David Katz told investors Monday that legal matters have tied up the sale. The delays have affected shares of Progressive Gaming and Shuffle Master, both of which are traded on the Nasdaq National Market.

"We believe the deal gets done, but the delays leave an overhang on the shares," Katz said in a note Monday focusing on Progressive Gaming. The company plans to transform itself into a technology provider to the casino industry once the deal is finalized.

"Our view on the shares remains that the critical catalysts are management fulfilling its guidance, further clarity on the pending legal judgment against Progressive and clarity on the sale of the table game content business to Shuffle Master," Katz said. "We believe it has critical financial implications for Progressive in the near term."

Deutsche Bank gaming analyst Bill Lerner still believes the additional table games will benefit Shuffle Master.

"Strategically, the addition of games would be a perfect fit for Shuffle, giving the company a near monopoly on proprietary felt-based tables," Lerner said. "Further, Shuffle Master can also use the content to support TableMaster and other electronic devices."

Lerner said Shuffle Master has locked up other table game titles that are similar to Caribbean Stud that would protect the game from competition.

Shares of Shuffle Master rose a penny Monday to close at $13.98, up 0.07 percent. Progressive Gaming shares fell 23 cents, to close at $4.97, off 4.42 percent.