In July last year, Scientific Games put forward a proposal to purchase all SciPlay shares that it did not own.
The agreement had an implied enterprise value of $1.90bn and would have seen SciPlay shareholders, other than SGC, receive 0.25 shares of Scientific Games stock for each share of SciPlay stock.
However, the decision to withdraw the proposal will see SGC retain its 81% economic interest and 98% voting interest in SciPlay.
SciPlay was previously the social division within Scientific Games until becoming an independent business, trading on the Nasdaq Stock Exchange, in 2019.
“In line with our approach to capital management and disciplined M&A we have decided that continuing to pursue this opportunity would not be prudent for our shareholders at this time,” SGC president and chief executive Barry Cottle said.
“We remain committed to our strategy of leveraging our unparalleled portfolio of hit franchises, world-class talent and premium content engine to develop great games fully cross-platform.
“SciPlay remains a strategic asset and has the opportunity to drive meaningful value as it grows its social casino market share and expands into the $20bn casual genre leveraging its expertise in engagement and monetisation.
“We will continue to invest in this sector in a disciplined manner. Importantly, as we advance our strategy, we will continue to take a holistic approach to capital management as we focus on allocating capital to drive growth in earnings per share.”
The move follows a host of M&A activity at SGC in recent months, including the acquisition of Swedish games developer Elk Studios last month and casino solutions provider Authentic Gaming in November 2021, the latter of which signified the company’s first foray into the live casino market.
In October last year, SGC also entered into a definitive agreement to sell its lottery business to private equity company Brookfield Business Partners for $6.05bn. Its sports betting division, meanwhile, it set to be sold to IMG Arena owner Endeavor.
SGC said proceeds from the lottery division sale will enable it to drive improved shareholder returns through significantly de-levering its balance sheet, investing in the core business and targeting accretive digital M&A to accelerate its growth strategies.