On Monday, PlayAGS, Inc. (NYSE:AGS) stock experienced a shift in rating as Truist Securities moved its stance from Buy to Hold, adjusting the price target to $12.50 from the previous $13.00.
The gaming company, known for supplying electronic gaming machines, has entered into an acquisition agreement with private equity firm Brightstar Capital Partners. The deal, valued at approximately $1.1 billion, or $12.50 per share in cash, reflects a significant premium over recent trading prices.
The acquisition price offers a 41% premium over PlayAGS's 90-day volume-weighted average price (VWAP) and a 40% increase from the closing price on the previous day, Sunday.
The new price target set by Truist Securities aligns closely with the agreed acquisition price. The firm had previously identified PlayAGS as a potential acquisition target in forecasts and analyses, including a joint downgrade with competitors.
As a result of the acquisition announcement, PlayAGS shares are now trading close to the buyout offer, prompting Truist Securities to revise its price target downward and alter the stock rating. The updated estimates from Truist Securities take into account the better-than-expected performance, which has been factored into the acquisition terms.
The transaction is a cash offer, which means that shareholders of PlayAGS will receive $12.50 for each share they own once the acquisition is completed. This offer represents a substantial premium and is seen as a favorable outcome for shareholders, given the company's recent market performance.
The acquisition by Brightstar Capital Partners is expected to close following the satisfaction of customary closing conditions and regulatory approvals. Both companies have expressed positive outlooks on the deal, with expectations that it will provide value to PlayAGS's shareholders and contribute to the company's growth trajectory under new ownership.
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