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Analysts Say Alliance, Gtech Deal is Unlikely

29 March 2004

Las Vegas Sun

A spokesman for a Las Vegas slot machine manufacturer named as a possible takeover target isn't commenting about the reports, but analysts say a merger isn't likely anytime soon.

Marcus Prater, senior vice president of Alliance Gaming Corp., said Friday he had no comment about reports that Gtech Holdings Corp., West Greenwich, R.I., is considering acquiring Alliance.

Alliance's Bally Gaming and Systems unit is one of the world's largest slot machine makers, competing with market leader International Game Technology of Reno as well as WMS Gaming of Chicago and Australia-based Aristocrat Leisure Ltd.

Smith Barney gaming analyst Michael Rietbrock issued a report last week that said several investors have been concerned that Gtech, which develops software, networks and professional services for lottery systems, might buy Alliance.

Rietbrock's report said investors think Gtech is considering acquisition deals, but he isn't convinced an Alliance takeover is in the works.

"While anything is possible, we view this combination as unlikely, given the valuation, size and redundancies with Spielo," the report said.

Rietbrock was referring to Gtech's acquisition of Spielo Manufacturing Inc. for $185 million in November.

Marc Falcone, a gaming analyst with Deutsche Bank, also said he doubted that Alliance would be in Gtech's sights, calling it "a rumor that has been blown out of proportion."

In his own report last week, Falcone said the gaming equipment manufacturing sector will continue to be robust with several states considering new gaming venues and expansion of existing markets.

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