IGT acquire Anchor Gaming

RENO, Nev. and LAS VEGAS, July 9 — International Game Technology (NYSE: IGT) and Anchor Gaming (Nasdaq: SLOT) announced today that the Boards of Directors of both companies have unanimously approved a definitive agreement pursuant to which Anchor Gaming will merge with a subsidiary of International Game Technology (“IGT”). This tax free, stock for stock transaction is valued at $1.365 billion, based on IGT’s July 6, 2001 closing price of $59.20 and the assumption of indebtedness of $430 million at March 31, 2001. Based on that price, Anchor Gaming shareholders would receive one share of IGT Common Stock for each share of Anchor Gaming. The exchange ratio is subject to a collar as described below. The transaction will be accounted for on a purchase basis and is expected to be accretive to IGT’s earnings. The combination creates a company with total combined annual revenues in excess of $2 billion.

As part of the transaction, Thomas J. (T.J.) Matthews will, at closing, join IGT as its Chief Operating Officer and will continue as President and Chief Executive Officer of Anchor Gaming. Upon closing of the transaction, two new directors will be added to the IGT Board of Directors, one of whom will be T.J. Matthews.

“We are very enthusiastic about this business combination,” said G. Thomas Baker, President and Chief Executive Officer of IGT. “IGT and Anchor Gaming have been joint venture partners since 1996 on the very successful Wheel of Fortune^® product. Upon closing, IGT will be able to recognize 100% of the joint revenue and profits previously shared by the companies. This is a significant strategic benefit. We are also very excited about the addition of Anchor Gaming’s significant executive talent which will contribute to the further growth of IGT.”

“No other company offers the depth of talent that IGT and Anchor Gaming will have together, from the executive level to design and manufacturing,” said T.J. Matthews, Chairman, President and Chief Executive Officer of Anchor Gaming. “We are looking forward to the many possibilities that the combination presents.”

Under the terms of the collar contained in the definitive agreement, each share of Anchor Gaming will be converted into one share of IGT subject to a collar from $50.00 to $75.00 per share. Under the collar mechanism, if IGT’s average stock price exceeds $75.00 per share during the 20-day trading period ending the third business day prior to Anchor Gaming’s shareholder vote on the merger, IGT will have the right to terminate the merger agreement, subject to Anchor Gaming’s right to elect to accept a lower exchange ratio such that the value of the stock received by Anchor Gaming shareholders equals $75.00 per share. In addition, if IGT’s share price during the 20-day trading period ending three business days prior to Anchor Gaming’s shareholder vote on the merger is less than $50.00 per share, Anchor Gaming will have the right to terminate the merger agreement subject to IGT’s right to provide a higher exchange ratio such that the value of the IGT stock received by Anchor Gaming shareholders equals $50.00 per share.

The merger is subject to the approval of both companies’ shareholders and regulatory approvals, including gaming regulatory approvals. The companies anticipate that the transaction will be completed in the first calendar quarter of 2002.

Houlihan Lokey Howard & Zukin provided a fairness opinion to IGT and Dresdner Kleinwort Wasserstein acted as financial advisor to Anchor Gaming.

International Game Technology is hosting a conference call regarding its acquisition of Anchor Gaming at 8:00 a.m. Pacific Daylight Time on Monday, July 9, 2001. The access numbers are as follows: