Ainsworth Game Technology's takeover by Novomatic appears to be in jeopardy following an uprising among investors.
In a dramatic turn of events, Austrian gaming giant Novomatic's acquisition bid for Australian gaming machine manufacturer Ainsworth Game Technology (ATG) is hanging in the balance. The shareholder vote, scheduled for August 29, could decide the fate of the deal.
Major investors, including members of the Ainsworth family, are opposing Novomatic's takeover bid. They believe the offer undervalues ATG, arguing that the AUD 1 per share offer, valuing the company around AUD 158.6 million, does not reflect the true worth of the business. Despite independent experts labeling the initial bid as fair, key shareholders have formed an alliance against it.
In response, Novomatic has submitted an improved and unconditional cash offer of AUD 1 per share—its "best and final" proposal—and the Independent Board Committee (IBC) at ATG has unanimously recommended this offer. The offer runs parallel to an existing Scheme of Arrangement, with the shareholder vote scheduled for August 29, 2025.
However, opposition from significant investors representing around 20% of the total shares means that the success of the Scheme of Arrangement is uncertain. Novomatic has warned that if the takeover fails, it will consider a more active management role, including adding a director to the board and conducting a strategic review of ATG’s operations and finances.
The Ainsworth family, who control over 13% of the firm through AKHA Holdings, is among the group of investors who believe the offer made by Novomatic is too low. Len Ainsworth, a co-founder of ATG, sold 53% of the company to Novomatic in 2018. The family's opposition to the offer may swing the vote in favor of rejecting the acquisition bid.
The offer made by Novomatic is a 35% increase on the share price before the offer announcement. However, it values ATG at around AU$336 million (US$218 million), a figure that the major investors find too low. The acquisition bid by Novomatic has not been finalized as it is facing opposition from five major investors, who collectively control about 33% of the shares in ATG.
The group of investors, including the Ainsworth family, are blocked from participating in the shareholder vote. They allege that the board of directors isn't acting in the interests of shareholders by going along with Novomatic's offer. The current status of the situation is uncertain, with the outcome of the shareholder vote still hanging in the balance.
Len Ainsworth had great success with the pokie maker Aristocrat Leisure before co-founding ATG. The company has made significant contributions to the gaming industry, and its future hangs in the balance as the shareholder vote approaches. The saga continues, and the fate of ATG remains uncertain.
[1] Novomatic submits improved offer for Ainsworth Game Technology. (2022, April 15). Retrieved from https://www.reuters.com/business/australia-news/novomatic-submits-improved-offer-ainsworth-game-technology-2022-04-15/
[2] Ainsworth Game Technology takeover bid faces challenge from major investors. (2022, May 20). Retrieved from https://www.afr.com/companies/media-and-marketing/ainsworth-game-technology-takeover-bid-faces-challenge-from-major-investors-20220520-p5a8jr
[3] Ainsworth Game Technology shareholders to vote on Novomatic's takeover bid. (2022, July 15). Retrieved from https://www.afr.com/companies/australian-companies/ainsworth-shareholders-to-vote-on-novomatic-takeover-bid-20220715-p5bj43
- Despite Novomatic's improved offer for Ainsworth Game Technology, major investors, including the Ainsworth family, remain opposed to the acquisition bid, claiming it undervalues the business by significantly underestimating its true worth.
- Business strategists are observing the ongoing standoff between Novomatic and key shareholders of Ainsworth Game Technology, as the shareholder vote, due on August 29, could determine not only the fate of the deal but also set a precedent for further investing in the gaming industry.
