Jefferies weighs in on Scientific Games' (SGMS-6.6%) proposal to acquire the remaining 19% stake in SciPlay at a premium.
Analyst David Katz says the offer to repurchase the public interest in SCPL is not surprising by itself, but says the pricing level could remain a matter of debate with investors.
The potential long-term upside from the deal is noted.
"We believe the opportunity for SGMS to simplify its structure and focus its operations includes the removal of the public element of SCPL. With ongoing processes to divest lottery and sports betting, we believe there remains considerable upside near-and-long-term, particularly given recent weakness."