Light & Wonder Considering Australia Stock Listing

Posted on: March 15, 2023, 04:18h. 

Last updated on: March 16, 2023, 12:42h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

Slot machine manufacturer Light & Wonder (NASDAQ: LNW) told investors Wednesday it’s considering a secondary listing of its equity on the Australian Securities Exchange (ASX).

Light & Wonder
Light & Wonder Executive Chairman Jamie Odell (right). The slot machine giant is considering an equity listing in Australia. (Image: The Australian)

That would be in addition to its current primary listing on the Nasdaq. Australia is one of Light & Wonder’s largest markets outside the US, and a Sydney listing could give the gaming company enhanced exposure to Australia’s institutional investors.

The ASX is a premium market with a long track record as a platform for global gaming companies and a deep and liquid pool of sophisticated investors and market participants who have a strong understanding of the gaming business,” said L&W Executive Chairman Jamie Odell in a statement.

The Las Vegas-based company said it will update investors when the evaluation process is finalized, though it didn’t reveal a related time line. It added that there are no guarantees that a secondary listing on the ASX will materialize.

Light & Wonder’s Deep Australia Ties

This isn’t the first time L&W has mulled an ASX listing. Nearly two years ago — then operating as Scientific Games — the company reportedly engaged Australian investment bank Jarden Australia to evaluate a potential secondary listing in that country.

Several months later, the company said it was considering an Australian initial public offering (IPO) for its SG Lottery unit. That transaction didn’t materialize because the parent company eventually sold the lottery business to private equity firm Brookfield, allowing it to substantially reduce debt, which was the primary motivation for considering the ASX listing.

L&W has other Aussie ties, as well. Odell is a well-respected Aussie gaming executive and previously ran Aristocrat — the world’s largest slot machine maker — for a decade. He’s also a part of Caledonia Investments, which previously purchased a $1 billion stake in Scientific Games from financier Ron Perelman.

“We believe they (Australian investors) will appreciate the value and long-term potential of L&W’s broad international business and strategy. We look forward to engaging with the market and our current shareholders on a potential secondary listing,” added Odell in Wednesday’s statement.

Light & Wonder Could Be Interesting to Aussie Investors

Based on Wednesday’s closing market capitalization of $5.13 billion, Light & Wonder is classified as a mid-cap stock, excluding it from some popular, large-cap-heavy domestic equity gauges. Based on that market value, it would be the 90th-largest company trading on the ASX.

Another reason L&W could be evaluating the secondary ASX listing is that Australian professional and retail investors are generally more excited about gaming equities than their US counterparts. For example, L&W’s rival Aristocrat Leisure Ltd. is the 18th-largest ASX-listed firm. Several other gaming operators rank among the 200 biggest firms trading in Sydney.

Additionally, Australian market participants have an affinity for US stocks. As just one example of that trend, the country’s largest exchange-traded fund (ETF) is linked to the S&P 500, not a benchmark of Aussie equities.