International Game offers net share settlement in exchange for 0% convertibles

New York, Feb. 8 - International Game Technology said it has begun an exchange offer for its $969.712 million principal amount at maturity of zero-coupon convertible debentures due 2033.

The Reno, Nev., maker of computerized gaming machines is offering new convertibles with the same terms but with net share settlement.

Holders who participate will receive a fee of $1.56 per debentures, equivalent to 0.25% of the accreted value as of March 9.

The net share settlement feature will allow International Game to pay cash for the accreted principal amount on conversion and stock for the remaining value.

International Game will account for the new debentures under the treasury stock equivalent method for calculating diluted earnings per share. It currently uses the if converted method which requires all of the shares underlying the debentures to be included in the diluted share count.

The exchange ends at 5 p.m. ET on March 9.

The information agent is D. F. King & Co., Inc. (banks and brokers call collect 212 269-5550, others call 800 714-3312).

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