Aristocrat Acquisition of VGT Presentation
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NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES.
Acquisition risks
Completion risk
Completion of the acquisition is subject to US anti-trust approval under the Hart-Scott-Rodino Antitrust Improvements Act ("HSR Act"). It is possible that this
clearance may be substantially delayed, not be forthcoming or subject to material conditions. The Placement, Ainsworth family offer and SPP will occur prior to, and
are not subject to, completion. If, for whatever reason, the acquisition does not proceed, Aristocrat may seek to buyback shares, use the funds to retire debt or a
combination of both.
Funding risk
The placement agreement includes certain rights of the sole lead manager to terminate those arrangements, and the availability of the acquisition debt facility is
also subject to various conditions precedent which mean that the funds may not be available in connection with the placement or under the acquisition debt facility,
in circumstances which may not also entitle Aristocrat to terminate the acquisition agreement. While the termination rights of the sole lead manager and the
conditions precedent of the banks are considered to be consistent with market practice, some of those rights could arise in circumstances outside Aristocrat's
control. As such, there is a risk that Aristocrat has an obligation to pay the purchase price for VGT under the Acquisition Agreement but, due to the termination of
the placement agreement or the unavailability of the acquisition debt facility, does not have the necessary amount of funding available. In this instance Aristocrat
would need to seek to put in place new financing arrangements, the terms of which may be less attractive than the proposed acquisition funding mix.
Historical liability
If the acquisition of VGT completes, Aristocrat may become directly or indirectly liable for any liabilities previously incurred by VGT, which may not have been
identified during due diligence, or which were of a greater magnitude than expected. Market standard protection (in the form of representations and warranties and
indemnities) negotiated by Aristocrat prior to its agreement to acquire VGT may not be adequate in these circumstances. Such liability may therefore adversely
affect the financial performance or position of Aristocrat post-acquisition.
Synergies and integration risk
There are risks that any integration between the businesses of Aristocrat and VGT may take longer than expected and that anticipated efficiencies and benefits of
that integration may be less than estimated. These risks include possible differences in the management culture of the two companies, inability to achieve synergy
benefits and cost savings, and the potential loss of key personnel.
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