PlayAGS has rejected Inspired Entertainment’s $370m bid to acquire the Nevada-based slots company. Inspired made an offer worth $10 per share, well over the market's valuation (on Monday) of $8.25 per share for PlayAGS.
The company specified that it is only rejecting the offer that has currently been tabled and will remain in discussions with Inspired. In a statement, PlayAGS’s board members and management said they are fully committed to focusing on the best interests of its stakeholders.
After news broke that an offer had been submitted on Monday, PlayAGS stock shot up 34%, from $6.04 to $8.06 Friday, and opened at $8.25 this Monday. Before acquisition rumors surfaced, PlayAGS was worth just a fifth of what it was valued in Q2 of 2019.
However, earlier this month, PlayAGS reported its first net profit since Q4 2019 and an increased adjusted EBITDA of 6% for the second quarter of 2022, combined with a 40% increase in the domestic sales of equipment.
The company generated $1.5m of net income for this year’s Q2, compared to a net loss of $3.9m for the same prior year period. According to PlayAGS, these positive financial results reflected improvements in its operating performance.
PlayAGS President and CEO David Lopez commented: "Our second quarter results reflect the growing returns we are realizing as a result of the significant investments made into our R&D, sales, and product management teams over the past 24 months."
This drastic turnaround in PlayAGS’ financial performance sparked interest from Inspired, whose Chief Financial Officer Stewart Baker said that the company was actively looking into mergers and acquisitions during a call made last Wednesday.
It remains to be seen whether Inspired will make an improved offer in its attempt to purchase PlayAGS.
