Sharesholder Rewards Revealed: Brightstar Lottery Announces $1.1 Billion Windfall
Brightstar Lottery Announces $1.1 Billion Capital Return to Investors
Brightstar Lottery, a leading player in the slot machine and gaming fintech industry, has unveiled a significant capital return plan worth $1.1 billion for its investors. The plan, which includes a special cash dividend and a new share repurchase program, is set to bolster the company's financial position following its recent sale of global gaming and PlayDigital units to Apollo Global Management.
The highlight of the capital return plan is a special dividend of $3.00 per share, totalling approximately $609 million, scheduled to be paid on July 29, 2025. This dividend, representing a 12% return based on the company’s $25.00 per share closing price in early July 2025, is expected to provide a substantial boost to shareholders.
Accompanying the special dividend is a two-year share repurchase program worth $500 million. The program includes a $250 million accelerated share repurchase (ASR) component designed to reduce the share float and potentially improve earnings per share. This buyback program replaces the previous repurchase authorization.
The company maintains a robust liquidity of approximately $2.9 billion, ensuring these capital returns without compromising operational flexibility. The funds will also be utilized to meet upcoming obligations such as Italy Lotto license payments worth $500 million and $400 million earmarked for general corporate purposes.
The record date for the distribution is set for July 14, 2025. The new company, Brightstar Lottery, will officially take the name for corporate and trading purposes on July 1, 2025.
The two-year buyback plan has raised questions among investors regarding the company's commitment to reducing shares outstanding. However, Brightstar aims to maintain a net debt leverage of around 3.0x, supported by robust cash flow generation.
Stifel analyst Jeffrey Stantial rates Brightstar Lottery a "buy" with a $20 price target, implying potential upside of 22.7% from today's closing price. Despite the need for more clarity on the two-year buyback plan, Stantial's positive outlook underscores investor confidence in Brightstar's strategic moves.
Notably, the capital return exceeds the estimated $500 million, making it a larger return than Wall Street expected. This move follows International Game Technology's (IGT) tradition of supporting an annual dividend of 80 cents a share and buying back debt and stock in recent years.
In conclusion, Brightstar Lottery's capital return plan represents a significant step forward in its strategic growth and financial management. The plan underscores the company's commitment to its shareholders while positioning it for future success in the dynamic gaming industry.
- The $1.1 billion capital return plan announced by Brightstar Lottery includes a special cash dividend, which will provide a substantial boost to shareholders.
- The financial industry has taken notice of Brightstar Lottery's commitment to its shareholders, as illustrated by Stifel analyst Jeffrey Stantial's "buy" rating and $20 price target.
- Implementing a two-year share repurchase program worth $500 million, Brightstar Lottery aims to improve earnings per share and reduce the share float.
- Despite the questions raised among investors about the company's commitment to reducing shares outstanding, Brightstar Lottery's capital return plan has exceeded Wall Street's expectations, positioning the company for future success in wealth management and personal finance.
