Shuffle Master would weigh a buyout: COO

By Chris Reiter

LOS ANGELES (Reuters) - Casino game maker Shuffle Master Inc (SHFL.O: Quote, Profile, Research), battling a slumping share price, would entertain a buyout offer if the offer was right, its chief operating officer said on Monday.

"I'm not sure that I would tell you that I'm committed to remaining public, remaining independent, or committed to going private or committed to being acquired," Paul Meyer told the Reuters Travel and Leisure Summit in Los Angeles. "At the end of the day, it all comes down to a number."

Shuffle Master has faced doubts about its acquisition of Stargames Ltd, which had slot machines malfunction in Macau in August 2007. Also, the company restated fiscal 2006 earnings after it overstated inventories.

Shuffle Master's share price has fallen about 75 percent since reaching an all-time high of $40.75 in May 2006. The shares closed up 3 percent at $9.24 on Monday, following Meyer's remarks.

Meyer said he believes the company could deserve a valuation of 25 times earnings, compared with a current price of around 20 times earnings for the fiscal year ending in October.

"Could we actually once again deserve a 25 multiple? I think that's possible," he said. "And then the question is what is a reasonable discount to that implied value for execution risk."

Meyer said the maker of card shufflers and electronic table games has not hired a banker to explore strategic alternatives for the company, but said the company has a close relationship with Deutsche Bank.

The fall in Shuffle Master shares may coax management, which own about 6 percent of the company, to increase their holdings.