PlayAGS Plunges After Ending Merger Talks with Inspired Entertainment

PlayAGS (NYSE:AGS) ranked as Thursday’s worst-performing gaming gillyflower , tumbling 20.76% after the companion announced merger discussions with Inspired Entertainment (NASDAQ:INSE) ended.

Last month, Inspired Entertainment offered $10 a part inward cash in for AGS, valuing the target area at $370 million. At that time, the Las Vegas-based expansion slot simple machine shaper confirmed it was inward talks with a thirdly company regarding a takeover, but cautioned investors a dealing may non materialize. AGS was flop to tip that out.

As previously disclosed, on Aug 12, 2022, PlayAGS, Inc. indicated that it was inwards preliminary discussions with a third political party that Reuters had identified as making an extend to win the Company. Such discussions make concluded without a transaction,” according to a Form 8-K filing with the Securities and Exchange Commission (SEC).

The gaming twist shaper said it won’t live making farther comments on the now-dissolved acquisition talks, and it won’t deliver public remarks on potency transactions in the time to come unless required to fare so by regulators.

AGS, Inspired Going it Alone…for Now

Immediately followers word of Inspired courting AGS, analysts speculated that a business deal may non get to the goal product line without the suer rearing its bid.

One analyst noted Inspired would feature needed to tour as mellow as $13 a share to obligate AGS to come up to the bargaining table. That’s in particular because the all-time high up for the target’s stock up was around $18. Additionally, it’s possible private equity house Apollo Global Management (NYSE:APO) loomed big in AGS’s considerations.

As of the oddment of the secondly quarter, the private equity giant owned 8.2 million shares of the gaming equipment maker, or 22.08% of its shares outstanding. Analysts speculated Phoebus Apollo might non follow enthusiastic around signing cancelled on a sell at just $10 a share. Going forward, it’s possible enthusiasm for AGS as a standalone troupe resumes inwards the investment funds community.

“For AGS, we believe in that respect was recent buying activity inward expectation of a potency sales agreement of the fellowship in a higher place $10 per share. After near-term arb buyers ‘shake out,’ the AGS story mildly improves as potentiality time value previously unrecognized by investors was highlighted in the boilers suit point of acquisition discussion, inward our view,” wrote B. Riley psychoanalyst Jacques Louis David Bain inwards a take down to clients today.

Still Leslie Townes Hope for AGS Takeover

While AGS is currently silent on whether or non it’s holding takeover talks with other parties, it’s possible other suitors substantiate the door is surface to, at the very least, induct discussions.

“We trust some M&A insurance premium should remain granted the discussions verify AGS is entertaining offers. For INSE, the merger discussions verify that direction is lawfully interested inward transformational acquisitions,” said Philip Roth Washington analyst Edward VII Engel in a note to clients.

He notes Inspired’s offering highlights note value in AGS, which is trading at deeply discounted levels relation to its equal group.

“With INSE offering $10 per share, we believe this affirms economic value for AGS trading near $6. Meanwhile, negotiations reveal that AGS is entertaining offers, and we trust other potential buyers power be interested as well,” added the analyst. “The paint vexation among investors was INSE’s pro forma leverage, but this would be to a lesser extent relevant to a larger buyer.”

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