IGT to Repurchase up to $1b. of Company Stock

Slot machine maker International Game Technology last week announced a plan to repurchase up to $1 billion of the company's outstanding stock over the next three to four years, in a move analysts say reflects a confidence in business trends.

IGT shares jumped as the casino game machine makers approved its buyback of up to $1 billion of its common stock last week, in a scheme which replaces its previous $500 million repurchase program. The Las Vegas company said it entered an accelerated buyback deal with Goldman Sacks and Co. for the first stage - a $400 million repurchase of shares.

The accelerated buyback will be funded with available cash and borrowings from IFT's revolving credit facility, the company said. It added that the remaining $600 million of the buyback is expected to be repurchased over the next three to four years.

Analysts said the stock repurchase program showed a growing confidence in slots technology industry trends, and also suggested it might soothe investors who are still sceptical about the company's $500 million acquisition of social gaming developer Double Down Casino in February.

Bank of America equities research analysts also upgraded IGT stock from an "underperform" rating to a "neutral" rating in a note issued to investors on Friday. With the stock on its way up, this suggests the investors agree with the analysts that this is a good move by IGT.