Interblock in focus as Aristocrat Leisure looks for deals

The Las Vegas entertainment machine business Interblock is believed to be in the sights of Aristocrat Leisure.

The $38bn Aristocrat Leisure continues to focus on a major acquisition, sources say, and the $1bn Interblock is the name that continues to feature in the discussion surrounding what its targets could be.

Las Vegas entertainment ­machine business Interblock is owned by Oaktree Capital Management, and DataRoom can reveal that the private equity firm has hired Macquarie Capital to ­advise on a sale.

Sources suggest Aristocrat remains in negotiations to buy the business in a deal that could be ­announced within weeks.

The speculation was circling in the market in February, as reported by this column at the time.

A purchase would follow Australia and US-listed gaming ­machine system creator Light and Wonder’s purchase of Grover Gaming for $US1.05bn.

Interblock describes itself as the world’s leading developer and supplier of award-winning electronic table gaming products.

Oaktree purchased the business in 2022 from Aruze Gaming, which had filed for bankruptcy.

Interblock is the No.1 supplier of electronic games in North and Latin America, Europe, the Middle East, and Africa and the Asia-Pacific, and creates new software and products for customers globally.

Aristocrat is expected to embark on a big deal to use the capital it has to deploy, according to analysts, but most expect it to be ­focused on interactive igaming.

Interblock is not in an area that falls into that category, but electronic table gaming, where it operates, is not something that Aristocrat is strong in.

Aristocrat, founded by Australian billionaire Len Ainsworth and one of the world’s largest gambling machine companies, has cash to deploy for deals.

It purchased the Nasdaq-listed Neo Group for $1.8bn, including debt, in 2024. It tried to buy Playtech in 2022 for $3.9bn but the deal failed to gain support from shareholders in its London-listed target.

In February, it announced the findings of its strategic review, saying it had completed the sale of Plarium Global to Modern Times Group for up to $US820m.

It said it would restructure its Big Fish Games operations, with no new game development and ­reduced investment, and it would retire the Pixel United reporting segment.

Oaktree is working on a sale of Interblock after it recently put forward a recapitalisation proposal for Star Entertainment that was rejected.

Star Entertainment, which ­finally reported a $302m half-year loss on Tuesday, as reported by The Australian, is understood to have now received $100m in its bank account from the agreed takeover deal with Bally’s Corp and its local backer, Bruce Math­ieson.

This is in addition to $60m from the sale of its Sydney theatre, so the payments will have bought the embattled casino operator more time.

The $250m bridging loan from King Street capital was understood to have come with all sorts of fees including a confirmation fee, but the understanding was that it was always going to be blocked by senior lenders, who would not want to share the security over ­assets in the event of a company collapse.

The $300m signed Bally’s Corp deal includes the issue of convertible notes at a conversion price of 8c per share that will result in it ­obtaining a 56.7 per cent stake in Star.

After receiving $100m, the remaining $200m is to be paid following a shareholder vote.

The deal will also result in Star’s 10 per cent shareholder, pubs billionaire Mr Mathieson, potentially provide an additional $100m in the company if required.

If this were to occur, Bally’s would reduce its investment to $200m.

Star’s board said it intended to unanimously recommend the deal, which excludes the Brisbane Queen’s Wharf project that will be purchased by Star’s partners.