Ainsworth on the verge of collapse following potential delisting from the stock exchange
In a surprising turn of events, several major investors of Ainsworth Game Technology have announced their intention to vote against Novomatic's A$1 per share take-private deal. The investors, including Allan Gray, Spheria Asset Management, and Ainsworth founder Kjerulf Ainsworth, collectively own over 20% of the company and argue that the offer undervalues Ainsworth's underlying assets, intellectual property, and long-term market position.
The Austrian company Novomatic, which already holds approximately 52.9% of Ainsworth, proposed to buy the remaining shares of the ASX-listed firm. The deal requires approval from shareholders holding at least 75% of voting rights to proceed, making the opposition of these major investors a significant challenge.
The investors have criticised the Ainsworth board for backing the deal without seeking higher bids or considering alternative growth strategies. They believe that the board may not be acting fully in shareholders' interests.
The independent experts at Lonergan Edwards & Associates endorsed Novomatic's "best and final offer" from April, which represented a 35% premium to pre-announcement share prices. However, the dissenting shareholders maintain that the offer still undervalues Ainsworth’s potential.
The vote for the proposed deal is scheduled for 29 August, 2025. Despite this, the Ainsworth spokesperson has stated that it is premature to comment on the proxies received due to the ongoing monitoring of proxies as they are received.
This opposition to Novomatic's proposed takeover is not entirely unexpected, given the investors' previous criticisms. Len Ainsworth, the founder of Ainsworth Game Technology who sold majority control of the company to Novomatic in 2018, granting the Austrian firm access to US markets, may find himself in a difficult position as his company faces potential privatization.
The story of Ainsworth Game Technology dates back to 2013 when Novomatic, a family-owned company that operates Admiral Casino, first invested in the company, prompted by regulatory changes necessitating overseas expansion.
Two additional investors, speaking anonymously, also plan to oppose the transaction. If only 25% of the remaining 47.1% shareholding opposes the deal, it could block the take-private plan. Ainsworth has not distributed dividends since November 2018, adding to the concerns of minority shareholders who allege share price manipulation and undervaluation of Ainsworth’s property portfolio.
- The investors, despite the endorsement of independent experts, still believe that Novomatic's offer undervalues Ainsworth Game Technology, a company known for its casino games business and intellectual property portfolio, and predict a challenging business environment if the take-private deal proceeds.
- In the light of the opposition from major shareholders, lenient towards poker and investing, the proposed deal may face a significant obstacle, as it requires the approval of 75% of voting rights to move forward.
- Amidst the controversy surrounding the takeover bid, the business community looks ahead to the upcoming vote on August 29, 2025, with many eyeing the potential impact of technology and finance on the decisions made by Ainsworth Game Technology shareholders.
