Shuffle Master would weigh a buyout: COO

By Chris Reiter

LOS ANGELES (Reuters) - Casino game maker Shuffle Master Inc (SHFL.O: Quote, Profile, Research, Stock Buzz), 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.

"I don't think there's an insider in the company who doesn't believe that the shares are a good investment right now," said Meyer, adding that after first-quarter earnings he'd expect some activity.

CEO SEARCH

Shuffle Master has been searching for a potential new CEO but does not have a bona fide external candidate for the job so far, Meyer said. Meyer also is acting chief financial officer, and the company expects to start a CFO search soon.

Shuffle Master in December announced that it had retained executive search firm Spencer Stuart to help the company in planning for the potential departure of Chief Executive Mark Yoseloff.

Yoseloff and the company's board are evaluating his future once his current contract ends in October.

(For summit blog: summitnotebook.reuters.com/)

(Reporting by Chris Reiter; Editing by Braden Reddall and Tim Dobbyn)