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Subsequent Events
6 Months Ended
Jun. 30, 2014
Subsequent Events [Abstract]  
Subsequent Events
Subsequent Events

Pending Acquisition of Bally Technologies, Inc.

On August 1, 2014, we entered into a merger agreement pursuant to which we agreed to acquire Bally Technologies, Inc., a leading supplier of games, table game products, systems, mobile, and iGaming solutions (“Bally”), for $83.30 in cash per common share, for a total enterprise value of approximately $5.1 billion, including the refinancing of approximately $1.8 billion of existing Bally net debt. 

The closing of the merger is subject to approval of the merger by Bally stockholders, expiration or early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”), receipt of certain gaming regulatory approvals and other customary closing conditions

The merger agreement contains certain termination rights for both Scientific Games and Bally and further provides that, in connection with termination of the merger agreement under specified circumstances, (1) we may be required to pay to Bally a termination fee of $105.0 million if all the conditions to closing have been met and the merger is not consummated because of a breach by our lenders of their obligations to finance the transaction, (2) we may be required to pay to Bally a termination fee of $105.0 million if the parties are unable to obtain approval under the HSR Act or to obtain the gaming regulatory approvals that are conditions to closing and (3) Bally may be required to pay to us a termination fee of
$80.0 million under specified circumstances, including, but not limited to, a change in the Bally board’s recommendation of the merger or in connection with Bally’s termination of the merger agreement to enter into a written definitive agreement for a “superior proposal” (as defined in the merger agreement).

The transaction is expected to be completed in early 2015. However, no assurance can be given that the transaction will be completed.

In connection with the pending acquisition of Bally, Scientific Games and SGI entered into a commitment letter with Bank of America, N.A., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Deutsche Bank AG New York Branch, Deutsche Bank AG Cayman Islands Branch, Deutsche Bank Securities Inc., JPMorgan Chase Bank, N.A. and J.P. Morgan Securities LLC and certain of their respective affiliates as additional commitment parties. Pursuant to the commitment letter, the commitment parties have agreed to provide the financing necessary to fund the consideration to be paid pursuant to the terms of the merger agreement (the “Debt Financing”). The Debt Financing is anticipated to consist of, among other things, (1) a senior secured term loan facility in a total principal amount of $1,735.0 million, (2) a senior secured incremental revolving credit facility in a total principal amount of $350.0 million, (3) amendments to, or the refinancing of, Scientific Games’ existing credit facilities, consisting of (a) an existing senior secured term loan facility in a total principal amount of $2,294.0 million and (b) an existing senior secured revolving credit facility in a total principal amount of $300 million, and (4) senior secured notes and senior unsecured notes yielding $3,450.0 million in aggregate gross cash proceeds and/or to the extent that the issuance of such notes yields less than $3,450.0 million in aggregate gross cash proceeds or such cash proceeds are otherwise unavailable, a senior secured bridge loan facility and a senior unsecured bridge loan facility up to an aggregate principal amount of $3,450 million (less the cash proceeds received from the notes and available for use, (if any)). The funding of the Debt Financing is contingent on the satisfaction of certain conditions set forth in the commitment letter. The merger is not conditioned on our obtaining the proceeds of any financing, including the Debt Financing.

For further information regarding the pending transaction and the Debt Financing, please see the full text of the merger agreement, a copy of which is filed as exhibit 2.1 to our Current Report on Form 8-K filed with the SEC on August 4, 2014, the full text of the commitment letter, a copy of which is filed as Exhibit 10.1 to our Current Report on Form 8-K filed with the SEC on August 4, 2014, as well as the section entitled "Risks Relating to Our Pending Acquisition of Bally" contained in "Risk Factors" in Item 1A of this Quarterly Report on Form 10-Q.