SCPL - SciPlay gains after activist pushes for sale to parent Light & Wonder

• SciPlay ( NASDAQ: SCPL ) rose 5.7% in after hours trading as activist investor Engine Capital, one of the biggest holders of mobile-game maker SciPlay ( SCPL ), urged the company to consider a sale of itself to parent company Light & Wonder ( NASDAQ: LNW ). The activist wants LNW to buy the 19% of SciPlay is doen't currently own.
• Engine Capital, which has a 5.7% in SciPlay, wants the company to consider selling itself to to Light & Wonder ( LNW ) for $15 to $16/share, according to a letter Engine Capital wrote to the board's of both companies on Monday. Engine Capital also has a stake in Light & Wonder ( LNW ).
• The Engine Capital letter comes after the activist first disclosed a stake in a 13D filing March. In April, SciPlay ( SCPL ) added Nick Earl, the former CEO of Glu Mobile to its board and in June added three more directors .
• Engine Capital argued in the letter that the current structure of SciPlay ( SCPL ) is "inefficient and creates an overhang" on the valuation of both companies. The activist also said it believes Light & Wonder ( LNW ) also trades at a significant discount to its intrinsic value, partially due to the "drag of SciPlay’s undervaluation." Engine Capital said the recommended purchase of SciPlay for $15-$16 would be immediately accretive to Light & Wonder .
• "That said, if a deal can’t be reached between both Companies or if Light & Wonder is no longer interested to acquire SciPlay, we don’t believe the status quo is desirable and we would then encourage SciPlay to start a review of its strategic alternatives and look for a buyer with the blessing of Light & Wonder," Engine Capital Managing Partner Arnaud Ajdler and Partner Brad Favreau wrote in the letter.
• The Engine Capital proposal comes after SciPlay ( SCPL ) in late December terminated talks with Scientific Games, now called Light & Wonder, for the company to acquire the remaining 19% of SciPlay it didn't own in a stock deal.

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