Ainsworth Game Technology's acquisition by Novomatic seemingly in peril following shareholder uprising
In the gaming industry, a tense standoff is unfolding between major shareholders and Novomatic, an Austrian gambling giant, over the proposed takeover of Ainsworth Game Technology. The offer values Ainsworth at approximately AU$336 million (US$218 million).
The crux of the disagreement lies in the offer price of AUD 1 per share. Major investors, including members of the Ainsworth family and significant shareholders, argue that this price undervalues Ainsworth's business, despite independent experts deeming the valuation fair. This has led to a coalition forming to reject the deal.
Novomatic, which already owns 52.9% of Ainsworth, has responded by submitting an unconditional, improved bid of AUD 1 per share—described as its "best and final" offer—valued at approximately AUD 158.6 million (~USD 104 million). This offer runs concurrently with the original Scheme of Arrangement.
The shareholder vote on the Scheme of Arrangement is scheduled for August 29, 2025. However, the bid faces a potential failure, with around 20% of shareholders reported to oppose it, putting it "on the brink of failure."
If the scheme does not pass, Novomatic has warned it may take a more active role in the company's management, including appointing an additional board member and conducting a strategic review of Ainsworth’s operations and structure.
This situation highlights a disagreement between major shareholders’ valuation expectations and Novomatic’s firm acquisition price, with the forthcoming vote being pivotal to the deal’s future. The Ainsworth family, one of the major investors opposing the takeover bid, collectively controls over 13% of the firm through AKHA Holdings.
It is important to note that Len Ainsworth, a co-founder of Ainsworth Game Technology, sold 53% of the company to Novomatic in 2018. The investors, who collectively control about 20% of the shares in Ainsworth Game Technology, allege that the board of directors wasn't acting in the interests of shareholders by going along with Novomatic’s offer.
The offer price represents a 35% increase on the share price before the offer announcement. The takeover bid is currently facing opposition from five major investors, including the Ainsworth family. If the shareholder vote swings in favour of the unhappy investors, it could potentially block the takeover bid.
Len Ainsworth had great success with the pokie maker Aristocrat Leisure before co-founding Ainsworth Game Technology. The investors' opposition could significantly impact the future of Ainsworth Game Technology, a company with a rich history in the gaming industry. The upcoming shareholder vote is set to be a critical moment in this unfolding drama.
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