Anti-merger: Emmett Investment Management releases open letter to AGS shareholders

May 14, 2024
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The letter voices its opposition to a proposed deal with Brightstar Capital Partners.

Emmett Investment Management has published an open letter to AGS stockholders to voice the company’s intention to vote against a proposed take-private deal involving Brightstar Capital Partners.

The investment manager owns nearly 1.5% of outstanding stock in PlayAGS. Emmett Investment believes this transaction “significantly undervalues the company.”

Company Founder and CIO Alexander Rohr outlined a few reasons why Emmett Investment is prepared to vote against the deal.

He wrote in his letter to AGS shareholders, “We feel compelled to share with you our concerns about AGS's recently announced take-private transaction with Brightstar Capital Partners (Brightstar).

“We do not believe the take-private transaction is in the best interest of stockholders, and we intend to vote against the transaction.”

He went on to add, “The Brightstar transaction was announced just hours before the release of AGS's transformational first quarter results.

“The company's first -arter results reinforce our optimistic view of AGS's prospects, as organic adjusted EBITDA grew 21%, far outpacing the industry.”

Rohr also stressed the importance of shareholders having full knowledge of the dynamics of such a deal.

He concluded by saying, “It appears that AGS stockholders are being asked to accept a bid from Brightstar that offers effectively zero — or negative — premium. We are concerned that many investors may not even be aware of AGS's exceptional recent operating performance since the company did not issue an earnings press release, as is its normal practice.

"It is clear to any reasonable market participant that a $12.50 take-private bid for AGS would be practicable only if announced before AGS could trade freely after the release of first-quarter results.

“In other words, the only way for this take-private bid to have been remotely palatable to stockholders was if stockholders did not fully appreciate the impact of the first quarter results.”

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