Novomatic Extends Takeover Offer for Ainsworth Amidst Growing Disputes
Novomatic Pursues Full Control of Ainsworth
Austrian gaming corporation Novomatic AG has prolonged its bid to acquire the remaining shares of Australian slot machine manufacturer Ainsworth Game Technology (AGT). The new deadline for this unconditional off-market offer is December 3. Novomatic initially set the expiration for November 3, offering shareholders AUD 1.00 per share, valuing the company at approximately AUD 158.6 million (about USD 103.1 million). This move continues Novomatic’s push to strengthen its hold on the Sydney-based business, as confirmed in a filing with the Australian Securities Exchange.
Stakeholder Recommendations and Shareholder Dynamics
The Independent Board Committee at Ainsworth, after consulting an independent expert, has advised shareholders to accept Novomatic’s offer, deeming it fair and reasonable unless a superior proposal emerges before the extended deadline. Over the course of 2024, Novomatic has increased its stake in Ainsworth from 52.9% to nearly 61.5%, after initially attempting to secure control via a Scheme of Arrangement method. This approach was thwarted by shareholder resistance, led notably by Kjerulf Ainsworth, son of the company founder Len Ainsworth.
Leadership Challenges Heighten Investor Uncertainty
Tensions within Ainsworth have been amplified by the recent resignation of CEO Harald Neumann, a former Novomatic executive. Neumann stepped down following advisories from the Nevada Gaming Control Board to withdraw his US license application, linked to investigations regarding political funding in Austria. His departure at this sensitive period adds to the uncertainty surrounding the company’s future.
Opposition by Minority Shareholders
Despite the Board Committee’s endorsement of Novomatic’s bid, significant opposition persists. Kjerulf Ainsworth has mounted a limited counter-bid to increase his ownership stake from 7.27% to 9.9%, proposing AUD 1.30 per share, which is notably higher than Novomatic’s offer. He frames this move as an effort to protect shareholder value and maintain Australian influence over the company’s strategic direction.
Preserving Independence and Future Prospects
In communications with shareholders, Kjerulf Ainsworth emphasizes that his counteroffer is not meant to seize control but rather to protest against the diminishing autonomy of the company. Although regulatory constraints limit his ownership to under 10%, he alludes to potential actions in the future should favorable conditions arise.
Underlying Industry and Ownership Challenges
The competing bids underscore the deepening divisions within Ainsworth’s ownership. The firm has faced operational challenges due to sluggish demand in its key markets and stiff competition from emerging gaming technology providers. While integration with Novomatic might bring operational stability, it also risks transferring critical control, decision-making power, and intellectual property rights away from Australia.
