Cost-Cutting at IGT Zeroes in on Corporate Jet

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International Game Technology is unloading a controversial corporate jet that figured prominently in a nasty proxy fight a couple of years ago before the slots and systems giant merged with GTECH Holdings.

The G5 aircraft went on the sales block as part of a broad disposal of non-core assets that includes 20 acres of land in Reno, Nev., where IGT was formerly headquartered, and a sale and lease-back agreement for the company’s 610,000 square feet of office and warehouse space in Las Vegas. IGT’s base was moved to London following the completion of the $6.4 billion merger with Italy’s GTECH earlier this year.

Smaller space is being sought for the Las Vegas sales force, while manufacturing has been returned to Reno, said GTECH head and IGT CEO Marco Sala, who detailed the moves on the company’s second-quarter earnings call.

The jet, which Sala reported to be “in the final states of the sales process,” was famously targeted in a heated 2013 battle waged by activist shareholder Jason Ader to replace three members of IGT’s then-board of directors.

The board had acquired the jet in 2012 for sales staff to use in closing business deals or for company officials to travel to state capitals while lobbying for gaming expansion. Media reports, however, indicated that then-IGT CEO Patti Hart was using the jet for personal travel, flying on it more than a dozen times to the San Francisco Bay Area, where she owned a home, and to other locations in the United States and overseas.

Ader eventually succeeded in placing one of his proxies on the board. Hart was replaced by Sala as part of the merger and named vice chairwoman.

The jet, together with the real estate, became obsolete in the belt-tightening post-merger which is expected to result in $280 million in cost savings over a three-year period.

“I think it’s certainly a change in philosophy with more of a focus on cost control and right-sizing the company to match current business levels,” said Eilers Research founder Todd Eilers.