Cyberview Share Discussion Threads

[the analyst] 05/3/2008 13:10

The strange thing is, I thought it was Williams Gaming (WMS) that were interested in acquiring Cyberview's technology, not IGT

Maybe they will put an offer too, creating a bidding war. Can but hope...

There was a slightly odd directors incentive agreement in December that looks to be specifically engineered to give cash payments, rather than shares to directors and others holding warrants, which is interesting. Looking back, that directors agreement was a strong hint that a takeover was expected

With an exchange rate of £2 to the pound the current deal is around £35m, valuing CYBV shares at £2.30 per share

[the analyst] 05/3/2008 12:09

IGT seeks to quickly get its hands on server-based technology (UPDATED)
By Liz Benston · March 4, 2008 · 5:13 PM
In a move that could accelerate the development of the next wave of high-tech slot machines, International Game Technology is in talks to acquire a small, technology-rich competitor, Cyberview Technology, for $70 million, according to merger documents obtained by the Sun.

Officials with IGT and Cyberview, both of which are publicly traded, declined comment.

Here's what's in it for IGT: It's pursuing server-based technology which gives casinos greater control over their slot machines. Cyberview already has developed that technology.

Cyberview is seeking a manufacturing license, and Nevada regulators have nearly completed their investigation of the company's background. The company had been scheduled to appear before the Gaming Control Board Wednesday for a vote on the license application, according to the documents. That appearance has been postponed.

Because Cyberview isn't yet licensed - putting it outside the realm of state regulators - IGT would not have to receive prior regulatory approval to acquire the company, a process that could take months.

Cyberview has 135 employees, a main office in London and a satellite office in Las Vegas. The company operates about 9,000 slot machines located in thousands of betting shops across Britain. These slots are operated via centralized computer servers that control the outcome of the games. The

company has an extensive library of games that can be quickly downloaded onto the machines.

The talks come at a pivotal time for the slot machine industry, which is plowing hundreds of millions of dollars into technology similar to that used by Cyberview in Britain. This technology, called "server-based" gaming, will revolutionize casino floors by allowing bosses to quickly change game titles, denominations, maximum bets and payback percentages at the touch of

a button. Today, slot machines in Nevada and many other states are governed by computer chips embedded in each device, which makes changing games more cumbersome.

IGT received regulatory approval in Nevada last year for a server-based system that has been tested at a few properties but has yet to be widely deployed. The company, which controls an estimated 70 percent of the global slot market, recently announced it would spend more than $1 billion on research and development over the next five years in an effort to remain the market leader amid a flood of new technology.

Besides Cyberview's server-based technology, the company controls several patents that allow for the development of arcade-like games that involve some element of skill and reward players based on their ability to work the games' controls. This technology would require a change in state law that governs the random outcome of gambling devices and is likely years away from implementation. Yet the games are viewed as a critical way to reach younger generations who grew up playing video games and show little interest in playing slot machines.

---

Updated at 5:13 p.m.: International Game Technology has issued a press release stating that the company is in "preliminary discussions" regarding a potential acquisition of Cyberview worth up to $70 million.

The parties have agreed to an exclusive negotiating period and the transaction remains subject to various terms, including approvals from both companies' boards, gaming regulators and Cyberview shareholders, according to the release.

IGT declined further comment.

[britishbear] 05/3/2008 12:01

Nice 33% jump - not in though :-(

Hmm, we shall see.

[the analyst] 05/3/2008 07:15

Blimey, must be some value in the technology for IGT to be looking to acquire!

"Prelim. Merger Discussions

RNS Number:3825P
Cyberview Tech Inc
05 March 2008


International Game Technology and Cyberview Technology, Inc. Announce
Preliminary Merger Discussions


RENO, Nevada and LONDON, UK - March 5, 2008, International Game Technology
(NYSE: IGT) and Cyberview Technology, Inc. (LSE: CYBV) today announced that they
are engaged in preliminary discussions regarding IGT's potential acquisition of
Cyberview.


The parties have agreed to an exclusive negotiating period. Under the terms
being discussed, shareholders, option holders and warrant holders of Cyberview
would receive aggregate consideration of up to US$70 million for all of the
outstanding equity securities of Cyberview.


Discussions are in early stages. The terms of any potential transaction may be
materially different from what is being discussed. The transaction remains
subject to negotiation of other terms, completion of due diligence, negotiation
of terms of a definitive agreement under Delaware law, regulatory approvals and
approvals of the Boards of Directors of both companies.


If a definitive agreement is reached, approval by Cyberview's shareholders and
satisfaction of other closing conditions not yet agreed upon would be required
to close the transaction. There can be no assurances that any agreement will be
reached or that a transaction will be completed on the terms set forth above or
others. There will be no further comment until an agreement is reached or the
discussions are terminated.


About International Game Technology


International Game Technology (www.IGT.com) is a global company specializing in
the design, development, manufacturing, distribution and sales of computerized
gaming machines and systems products.


About Cyberview Technology, Inc.


Cyberview is a leading provider of server-based downloadable gaming systems
underpinned by a strong intellectual property and patent portfolio. The strength
of the Company's system is its end-to-end security, flexibility, scalability,
reporting capabilities and audit trail. This innovative and flexible technology
allows customers to change the game offering on demand, thereby enabling the
operator to customise its offering in order to maximise revenue. It also aids
administration by providing detailed reports for operators, regulators and the
tax authorities. The Cyberview system is easily adapted to meet the needs of
various regulatory regimes enabling it to be deployed in most gaming markets and
countries across the world.


The Company's products include:


Gaming machines supplied to UK bookmakers; VLT (Video Lottery Terminals) to
lotteries and other gaming operators; Server-based downloadable gaming slot
machines to the casino industry.


Statements in this release, which are not historical facts, are "forward
looking" statements under the Private Securities Litigation Reform Act of 1995.
Although IGT believes that the expectations reflected in any of its
forward-looking statements are reasonable, actual results could differ
materially from those projected or assumed. IGT's future financial condition and
results of operations, as well as any forward-looking statements, are subject to
change and to inherent known and unknown risks and uncertainties. IGT does not
intend, and undertakes no obligation, to update forward-looking statements to
reflect future events or circumstances.


Information on risks and factors that could affect IGT's business and financial
results are included in our public filings made with the Securities and Exchange
Commission."

[the analyst] 04/3/2008 23:51

630,000 shares traded and the price ticked up

Wonder who is accumulating a stake, and why?

[britishbear] 20/2/2008 15:02

Surprised it has held up.

Tempting to short this for a short term gain.

[the analyst] 19/2/2008 16:23

Certainly is a lot of value to be had out there right now.

No need to be buying anything too speculative at the moment, when there are so many value stocks around. That said, I'm following quite a few high risk companies, waiting for news and ready to jump in.

I guess that is what you are doing looking at Cyberview?

[britishbear] 19/2/2008 11:03

Every little helps ;-)

Too busy buying GVC - gaming sector on insanely low PE and yield of 20-30%

[the analyst] 18/2/2008 12:27

I see you picked up 200,000 on the sly this morning, bb - well done!

[britishbear] 18/2/2008 00:16

Interesting article. You have it about right I reckon - the trouble is that they are the small players and may just get frozen out.

The are plenty of examples of companies with the best technology going bust though sharp business practices.

A licence would boost the share price in the short term and the article suggests they may well be issued.

Interesting.

[the analyst] 15/2/2008 22:12

The interesting thing (to me) is that at all of these industry shows and talking to industry professionals, Cyberview keep cropping up in the conversation, even without me mentioning them.

Of course, despite the following they have, Cyberview may never get a licence or a contract...

However, it's worth considering the fact that Cyberview's market cap is only just over 10 million, whilst others the only others mentioned in the same breath have market caps of 100s of millions, or even billions.

I don't think Cyberview are likely to make it into that league, but it wouldn't surprise me if they were approached for the technology

"A panel of manufacturers representing Aristocrat Technologies, Bally Technologies, International Game Technology, Cyberview Technology and WMS concurred server-based systems may lead to the development of skill-based casino games that more closely resemble the fare offered by PlayStation and X-Box.

"It'll be X-Box games for money," predicted Todd Elasser, technical compliance director for Cyberview, which has a Las Vegas office.

The Nevada Gaming Commission recently gave the green light to skill-based games in Nevada casinos, but only as a bonus component of a game of chance.

Elasser said he also thinks games requiring team play will be developed for casinos to further enhance the social aspect of gaming.

Panelists also said they expect server-based systems will enable regulators to log in remotely to casino systems so they can monitor games in real time.

"You may be able to resolve player disputes without having to leave your office," Elasser told regulators."

[the analyst] 08/2/2008 20:43

Blimey, just looked at CRES - you're not cheering me up about my investment in CYBV, Wiganer!

He's obviously an expert when it comes to land-based casinos, but not water-based...

[wiganer] 08/2/2008 20:13

Larry was involved with CRES, briefly.

[the analyst] 08/2/2008 19:30

"If you're in the market for a casino, Larry Woolf may be just your man."

[the analyst] 08/2/2008 19:28

A bit more on Larry Woolf:

"Larry J. Woolf
Founder and Chairman
Mr. Woolf has been in the gaming industry for nearly forty years. He started with Harrah's in 1967 and has worked in management positions for several high profile, publicly traded hotel/casinos until he founded Navegante Group in 1995. Mr. Woolf was in Atlantic City and the inception of gaming there. He was Senior Vice President of Operations at Caesars when he left in 1984 to become President of Caesars Tahoe. In 1990 Mr. Woolf became the Chairman, CEO and President of MGM Grand, Las Vegas. In 1995 Mr. Woolf founded his own company and has been Chairman, President and CEO of several more companies he has since opened, including Navegante Corporation of Canada and Trillium Gaming in Toronto. He is an owner, operator of Casino Fandango in Carson City, Nevada, a gaming consultant for Galaxy Macau and has an interest in Amazing Holdings in Taiwan.
Larry Woolf started in the gaming business in 1967 with Harrah's Hotel/Casino in Reno, Nevada, and was promoted to Casino Manager in 1974, a position he held for four years. At the time of his appointment, he was the youngest casino manager in the company's history.
In 1979, Mr. Woolf joined Caesars Atlantic City and was directly responsible for the pre-opening planning, hiring and training of the casino division staff. Not long after opening, he was appointed Senior Vice-President of Operations and was given the added responsibilities of the Hotel and Food and Beverage Divisions. His duties included interacting with the state legislature and various regulatory agencies on a regular basis to define and clarify the numerous issues in this new gaming jurisdiction. Mr.Woolf also took on the task of setting up a worldwide marketing organization. Within one year he had established operating offices in New York, Chicago, Philadelphia, Mexico City and Hong Kong as well as identifying and placing over 20 agents worldwide.
In 1984, Mr. Woolf was appointed President of Caesars in Lake Tahoe, Nevada. After his first 12 months in Lake Tahoe, Caesars posted a profit, a stunning turnaround from the property's prior history.
In 1990, Mr. Woolf joined the MGM Grand Hotel & Casino as Chairman and CEO. It took more than three years and a billion+ dollars to design, build and staff this 5,000+ room hotel and casino. While operating this billion-dollar enterprise, Woolf contracted such entertainers as Barbara Streisand, Mike Tyson and the Rolling Stones, just to name a select few.
In 1995 after a short retirement, Mr.Woolf then founded the Navegante Group Inc., which assembled an elite corps of executives and professionals who explore, identify, evaluate and optimize opportunities for a variety of clients worldwide. Through the Navegante Group, he beat out twenty-seven other potential operators to win the bid to develop and operate Casino Niagara, which has since become one of the most successful casinos in the world today.
Recently, he successfully opened Casino Fandango (July 2003), located in Carson City, Nevada. The casino has been extremely well received by its customers and is currently outperforming the marketplace."

[the analyst] 08/2/2008 19:27

Larry Woolf is on the board of directors and he is the founder and CEO of Navegante Gaming:

Navegante Gaming
Navegante Gaming is an elite corps of professionals in the hotel/casino/resort industry. Our executive team has years of experience and an extended network to help facilitate casino management operations. Navegante manages all types of properties, large or small, domestic or international.
Navegante has developed a reputation of making fast, but experienced decisions and will start operating with a handshake. By keeping Navegante's core executive team small, operations are never stalled by the well-known corporate red tape, and all decisions are quickly acted upon. Navegante is in an enviable position to be able to select management projects and/or partners with which it gets involved. Navegante never takes on projects solely for financial gain; Navegante first ascertains whether or not it can add value. This type of philosophy has helped Navegante's management opportunities grow and earned the esteemed reputation as the GO-TO company when investors need management assistance.
Navegante Gaming is currently managing the following properties:
Casino Fandango – Carson City NV (Owner/Operator)
Plaza Hotel & Casino – Las Vegas, NV (Investor Managed)
Las Vegas Club – Las Vegas, NV (Investor Managed)
Western Hotel & Casino – Las Vegas, NV (Investor Managed)
Goldspike Hotel & Casino – Las Vegas, NV (Investor Managed)
Grand Sierra Resort – Las Vegas, NV (Investor Managed)
PlayElko – Las Vegas, NV (Investor Managed)
Our current portfolio consists of over 2500 hotel rooms, 75 table games, and 2500+ gaming devices.

[the analyst] 08/2/2008 11:20

One of the big issues with gaining the licence has been the use of Microsoft Operating system software.

Of course, this is not a problem at all according to Cyberview, as it is their security that surrounds the software that makes it secure. However, Microsfot still have a reputation for poor security, which has hampered the Cyberview progress, I believe

Apparently, it is just a few of the older generation on the Nevada Gaming panel that do not seem to appreciate that the software is secure, but they need to be convinced.

[britishbear] 08/2/2008 10:26

Interesting post. There is no reason why they will not get a licence but equally, having machines in a casio does mean that they will be played if the game is poor. I hope they have developers working hard on new material.

[the analyst] 05/2/2008 22:10

No, not good, but nothing particularly shocking either. I thought the overall trading for the period was pretty much as I had expected. The UK profit has been eaten up by the millions being invested in the US, so yes, US is key.

The reduction in cash shows the change in business model to taking a percentage of the revenue, rather than just selling machines and making very little ongoing revenue. This means though, that the cash will be needed to make cabinets when they get contracts to place them into casinos and is likely to disappear if they do well gaining contracts. Thus, the cash can no longer be seen as an asset that will stay on the books for years to come, imo.

The big question for me is whether the games and technology are good enough to break into the US. At the moment, I don't know the answer. However, compared to some of the new blockbuster IGT games, the Cyberview ones look poor. That said, they are better than many of the slots I saw last time I was in Vegas. They may fit well into some of the smaller Vegas properties that do not invest in the most expensive machines, but want the cost-savings associated with Cyberview technology

One of the Cyberview directors owns five Vegas properties and told me he would put machines into them if they get the licence. Whether that is just talk, again, I don't know...

[britishbear] 04/2/2008 10:54

analyst - nasty trading statement.

Some comment here that is hard to argue with.



Still has potential but the US is key - so far it has not delivered.

[the analyst] 28/1/2008 12:34

Cheers BB

I think you are right about the Time Play option.

I thought it was great, but like you, I'm not sure whether it will get any sort of take-up as it stands right now. The big problem is explaining the product to the players - if it needs any explanation at all, then it is too complex.

They said that the response they were getting was phenomenal, but I take that with a huge pinch of salt - could be phenomenal as in bad!

Also worth noting that Inspired have now got a contact to put games onto the Cyberview machines in Ladbrokes. Not sure if this is a really bad thing, but it seems to suggest that Ladbrokes want more diversity in their games range.

I's a huge gamble, but I still think that if Cyberview break into Vegas and get some machines into the casinos then we could be looking at a 10-bagger here.

The most reassuring thing at the moment is that they have over £14m cash in the bank

[britishbear] 28/1/2008 12:21

Regarding "time play" the word on the street is that punters are not interested and that feedback has been poor.

Punters want to have the chance to win big not just know that they can press a botton for 1 hour for $20. Where is the gambling in that.

I would discount this option. The William Hill gig is more interesting.

[britishbear] 28/1/2008 12:18

Excellent update. Thanks analyst.

Watching but tempted. As always, it is the competitive nature of this sector that puts me off.

[the analyst] 24/1/2008 22:47

Was at the ATEi / ICEi show over the last three days, lots of great new games and some very interesting technology was on show. It certainly is a very competitive industry, which is not surprising, given the potential rewards up for grabs.

Talked to Todd Elsasser, Technical Compliance Director of Cyberview about the US gaming licences they have applied for. Again, they are very optimistic with regards to their chances of obtaining the the Nevada licence in the next few months. My take on it is that they should get a licence before the summer, Todd was hoping that the licence could be awarded at the Nevada Gaming Council meeting in March.

Saw the new cabinets - they look and feel very good. The new slots they have are far better than the ones currently on offer in Ladbrokes and many appear to be exclusive to Cyberview. Was told that they have been attracting a lot of interest (but they would say that, right?). Anyway, to me the slot offering was now good. Not amazing, especially when you look at games like Star Wars, Tomb Raider, Monopoly etc, from IGT, but good. However, with Cyberview, it is really the technology and patents that are key to the future, new games can be added very easily.

There was also the opportunity to see the new 'Time Gaming' offering that was attracting a lot of interest. The player basically pays for time at the machine, rather than per spin/play. They had some great innovative 'slots' in the form of arcade games. These included a 'shoot em up' type game and a very impressive pinball game that work in the same way that slots work, but involve skill as well as luck. It's almost impossible to say how they will go down with the US market market, but I have to say, I was impressed by them. They also have the Time Play option for the video poker, which is very clever and a nice way of giving value for money to the player, whilst still retaining very good margins. Players can know beforehand how much they will spend and how long they will play for, which could be a big hit. Again, the concept is untested in the market, but interesting technology. The technology has been thoroughly patented.

On the contract front, I was told that Cyberview recently renewed their contract with Ladbrokes. This is great news when you consider that Inspired Gaming have partly lost their contract with William Hill. Obviously Ladbrokes are more than happy with Cyberview as their provider, which is reassuring. Better still, Cyberview negotiated better terms on the contract, so will be taking a better percentage than they were. Excellent news imo.

Was also told that William Hill have contacted Cyberview recently with regard to installing machines into their betting shops. Obviously, there is a lot of interest in the technology and gaming offering they are developing. It was mentioned that these are only talks at the moment, but potentially, it could be an (unexpected) positive, should they win a contract to supply at least some machines in William Hill shops.

Finally, was told that there had been a lot of interest in Cyberview machines from Bingo hall owners. Again, no contract, but a lot of interest.

Whether any of this 'potential' turns into real contracts, I do not know, but a lot to be hopeful about.

Cheers

t.a.