Novomatic has launched a second takeover bid for Ainsworth Game Technology (AGT), however, has held firm on its ‘best and final’ valuation.
Alongside a previously tabled scheme of arrangement, Novomatic has announced a cash takeover offer for the Australian-based poker machine manufacturer.
What remains consistent between the two offers is the price, as Novomatic once again offered AGT’s shareholders AU$1 per share – representing a 35% premium on AGT’s shares.
As the takeover offer is unconditional, Novomatic is also eligible to purchase Ainsworth shares on-market at or below $1 per share.
Shareholder unrest
Novomatic, which currently holds a 52.9% controlling stake in AGT, has introduced a second offer in response to previous dissatisfaction of the aforementioned scheme offer.
Kjerulf Ainsworth, son of founder Len Ainsworth and second-largest shareholder, accused the company of undervaluing its US property assets and stated his belief that Novomatic’s offer should be closer to $3 per share.
“We’d like full access to the properties for an updated valuation,” he told the Australian Financial Review in July. “A clear answer on when the properties were last valued, by whom, the assessed value and the methodology … an answer as to why the independent board about the scheme has not addressed the property valuations.”
Other AGT shareholders, including Allan Gray, Spheria Asset Management and Kanen Wealth Management, have also expressed their disappointment in the proposal, stating that it undervalues the business.
Novomatic acknowledged the lack of support for the scheme from “a small number of shareholders”, but argued that by providing an option to sell into a takeover offer, Novomatic has put control into the hands of AGT’s individual shareholders.
“Novomatic’s unconditional takeover offer provides instant liquidity to all Ainsworth shareholders and ensures every Ainsworth shareholder is able to make their own decision in relation to the offer, regardless of the outcome of the Scheme meeting,” said Novomatic Board Member Stefan Krenn.
AGT’s independent board committee has provided its backing of the offers and recommended AGT’s shareholders accept them both in the absence of a superior proposal.
Next steps
A meeting to vote on the scheme of arrangement is scheduled for 29 August, although Novomatic expects AGT will apply to court for a postponement of the meeting in light of the new offer,
If the scheme is not approved by shareholders, Novomatic has confirmed that it plans to adopt a more active approach to the management of its investment in Ainsworth.
Measures would include increasing the representation of Novomatic on AGT’s board through the appointment of a Novomatic representative as a fifth director, and a strategic review of AGT’s business operations.
Novomatic also set forth its plans to delist AGT from the ASX if its shareholding exceeds 75%.
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