{"id":226651,"date":"2022-08-15T16:41:19","date_gmt":"2022-08-15T21:41:19","guid":{"rendered":"https:\/\/www.casino.org\/news\/?p=226651"},"modified":"2022-08-15T17:20:16","modified_gmt":"2022-08-15T22:20:16","slug":"ags-stock-continues-soaring-on-takeover-speculation","status":"publish","type":"post","link":"https:\/\/www.casino.org\/news\/ags-stock-continues-soaring-on-takeover-speculation\/","title":{"rendered":"AGS\/Inspire Deal Would Be Accretive, Boost Free Cash Flow, Says Analyst"},"content":{"rendered":"

Shares of gaming device maker AGS (NYSE:AGS) jumped 7.78% today on more than double the average daily volume. That’s as market participants digested news of the company rebuffing a $10 per share takeover bid, reportedly from Inspired Entertainment (NASDAQ:INSE).<\/p>\n

\"AGS
AGS slot machines pictured in an investor presentation. The stock rallied again today on takeover news. (Image: AGS)<\/figcaption><\/figure>\n

AGS revealed it was rejecting the bid last Friday<\/a> in a Form 8-K filing with the Securities and Exchange Commission (SEC). While the target has yet to confirm Inspired is in fact the suitor, it notes it\u2019s in ongoing discussions with a third party. That stoked optimism that a deal could eventually be reached, likely explaining today\u2019s rally in the shares.<\/p>\n

\n

On the back of today\u2019s rally, AGS stock is up a staggering 49.11% over the past week, and a scorching 78% over the past month. Monday\u2019s close at $8.10 represents the stock\u2019s first settlement above $8 since late February.<\/p>\n<\/div>\n

Even with those bullish statistics, if AGS were to eventually accept a $10 a share offer, that implies the stock could rally nearly 25% from current levels.<\/p>\n

Analysts Bullish on AGS\/Inspired Marriage<\/h2>\n

While much of Wall Street\u2019s attention is on AGS as the target in this transaction, analysts see benefits in the proposed deal for Inspired, too.<\/p>\n

Based on our merger math, we believe this transaction can be highly accretive, where a $10 all-cash deal would boost INSE’s FCF\/share by 75%. Even under a revised bid that values AGS higher and includes an equity component, we believe this deal can still drive value while keeping leverage below 4.5x,\u201d<\/strong> wrote Roth Capital analyst Edward Engel in a note to clients today.<\/p><\/blockquote>\n

The current offer on the table for AGS is $10 per share in cash, which the target clearly feels is too low. Hence the rejection. There is a sense among analysts that valuing AGS at $370 million, as does the current proposal, is somewhat of a discount<\/a>, despite representing a 66% premium to the stock\u2019s Aug. 11 closing price — the day prior to the offer becoming public.<\/p>\n

Inspired previously signaled a willingness for dealmaking. But management says that will be in prudent fashion, and the company won\u2019t overpay simply to make an acquisition.<\/p>\n

Other Benefits<\/h2>\n

Inspired is a supplier of<\/a> video gaming terminals (VGT) and software, so there are potential cost-reducing opportunities in combining with AGS.<\/p>\n

\u201cWe believe this deal is capable of delivering over $25M in cost synergies, which takes into account public company costs and prior supplier transactions of similar scale, where cost synergies ranged from $30-50 million,\u201d adds Engel.<\/p>\n

For Inspired, much of the allure in making a run at AGS comes from geographic diversification. The suitor relies on the UK for 70% of sales while just three states — Oklahoma, Texas and Washington — combine for 45% of AGS revenue.<\/strong><\/p>\n

As Engel notes, the larger scale offered by the two companies combining could broaden the investor base.<\/p>\n","protected":false},"excerpt":{"rendered":"

Shares of gaming device maker AGS (NYSE:AGS) jumped 7.78% today on more than double the average daily volume. That’s as market participants digested news of the company rebuffing a $10 per share takeover bid, reportedly from Inspired Entertainment (NASDAQ:INSE). AGS revealed it was rejecting the bid last Friday in a Form 8-K filing with the […]<\/p>\n","protected":false},"author":46,"featured_media":226655,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[10,32093,69293],"tags":[81903,81966,81890],"acf":[],"yoast_head":"\nAGS Stock Continues Soaring On Takeover Speculation<\/title>\n<meta name=\"description\" content=\"AGS stock rallies anew as takeover talk continues.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.casino.org\/news\/ags-stock-continues-soaring-on-takeover-speculation\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"AGS Stock Continues Soaring On Takeover Speculation\" \/>\n<meta property=\"og:description\" content=\"AGS stock rallies anew as takeover talk continues.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.casino.org\/news\/ags-stock-continues-soaring-on-takeover-speculation\/\" \/>\n<meta property=\"og:site_name\" content=\"Casino.org\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/Casino.OrgNews\" \/>\n<meta property=\"article:published_time\" content=\"2022-08-15T21:41:19+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-08-15T22:20:16+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/08\/AGS3.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1280\" \/>\n\t<meta property=\"og:image:height\" content=\"960\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Todd Shriber\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@etfgodfather\" \/>\n<meta name=\"twitter:site\" content=\"@Casino_Org\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Todd Shriber\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.casino.org\/news\/ags-stock-continues-soaring-on-takeover-speculation\/\",\"url\":\"https:\/\/www.casino.org\/news\/ags-stock-continues-soaring-on-takeover-speculation\/\",\"name\":\"AGS Stock Continues Soaring On Takeover Speculation\",\"isPartOf\":{\"@id\":\"https:\/\/www.casino.org\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.casino.org\/news\/ags-stock-continues-soaring-on-takeover-speculation\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.casino.org\/news\/ags-stock-continues-soaring-on-takeover-speculation\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/08\/AGS3.jpg\",\"datePublished\":\"2022-08-15T21:41:19+00:00\",\"dateModified\":\"2022-08-15T22:20:16+00:00\",\"author\":{\"@id\":\"https:\/\/www.casino.org\/news\/#\/schema\/person\/f4cecf70a5032bc4e60eb73fc86d4a85\"},\"description\":\"AGS stock rallies anew as takeover talk continues.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.casino.org\/news\/ags-stock-continues-soaring-on-takeover-speculation\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.casino.org\/news\/ags-stock-continues-soaring-on-takeover-speculation\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.casino.org\/news\/ags-stock-continues-soaring-on-takeover-speculation\/#primaryimage\",\"url\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/08\/AGS3.jpg\",\"contentUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/08\/AGS3.jpg\",\"width\":1280,\"height\":960,\"caption\":\"AGS slot machines pictured in an investor presentation. The stock rallied again today on takeover news. 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