The news was first reported by Reuters but PlayAGS has since confirmed it received an offer from a third party.
The gaming equipment provider has offered $10 per share in cash to acquire the slot machine maker. PlayAGS shares ended trading on Thursday at $6, jumping 25% on Friday upon the offer to $7.52.
While Inspired Entertainment declined to comment on the matter, PlayAGS confirmed in a statement that it had received a proposal, noting that it did not accept the offer but remained in preliminary discussions about a potential deal. The group added that no transaction was certain.
Speaking on an analyst call on Wednesday, Inspired Entertainment CFO Stewart Baker said the group was actively looking at a number of M&A activities.
“We are certainly willing to use capital for M&A if it’s something that strategically fits with what we are trying to do,” said Baker. “And there seem to be a lot of things around right now presenting themselves as possibilities.”
Based in Las Vegas, PlayAGS makes gaming tables and interactive solutions for gaming houses. It is backed by private equity firm Apollo Global Management, and went public in 2018.
The company is worth just a fifth of what it was valued at in 2019, largely due to the restrictions in place amid the Covid-19 pandemic, with the casino gaming industry and its vendors hit particularly hard. The group did, however, beat analyst estimates in its quarterly results last week, reporting $76.6m in revenue for the period.
New-York based Inspired has a market value of around $400m, with the company last week reporting a 72% year-on-year increase in quarterly revenue to $71.3m.
Gambling Insider has reached out to both companies for comment.
