Novomatic’s long-running pursuit of Ainsworth Game Technology (AGT) has once again hit a brick wall.
AGT confirmed that the Austrian gaming giant’s attempt to purchase all the shares it did not already own failed, and the Transaction Implementation Deed has been terminated – bringing to an end Novomatic’s current takeover bid.
“As the Scheme has not become Effective on or before the End Date and the Novomatic Takeover Offer has lapsed, Ainsworth advises that it has terminated the Transaction Implementation Deed in accordance with clause 13.1(a) of the Transaction Implementation Deed, effective immediately,” stated AGT, after the deadline for the offer ended on 6 February at 7pm.
Dogged pursuit
Novomatic’s attempts to privatise the Australian company have played out somewhat like a soap opera since the company unveiled its initial offer in April.
At the time, Novomatic held a 52.9% in AGT, which it has since increased to 66.59% as of 29 January.
Novomatic initially offered AU$1 per share for AGT. However, the offer was derided by a portion of AGT’s minority shareholders – led by Kjerulf Ainsworth, the son of AGT’s founder Len Ainsworth.
“I believe AGT is currently significantly undervalued, and that it represents an excellent investment opportunity in an industry that continues to grow globally,” Ainsworth said in a letter to the ASX in October.
In retaliation, Kjerulf Ainsworth announced his own bid to increase his shareholding by 2.9% by offering AU$1.30 per share. The deadline for the offer has passed; however, at the time of writing, there has been no update on the success of the bid.
CEO setback
Alongside consternation from AGT’s minority shareholders, Novomatic was also forced to deal with the departure of AGT’s CEO, Harald Neumann, after the Nevada Gaming Control Board (NCGB) informed AGT to withdraw his licence application.
In a public hearing in front of the board, members questioned Neumann over accusations of misleading regulatory agents, suppressing phone records and lying on a US visa application.
Neumann, formerly the CEO of Novomatic, had been brought into AGT to help steer Novomatic’s takeover bid, but was forced to step down following the damming ruling in Nevada. He was replaced by AGT’s COO Ryan Comstock, who is filling the role until a permanent replacement is found.
For now, Novomatic is prevented from making another offer for control of AGT for four months following the closure date.
However, given the time and money invested into the takeover attempt so far, it is unlikely this latest setback will be the final twist in the tale, given AGT’s strategic importance to Novomatic’s future roadmap.
In particular, taking control of AGT would provide Novomatic with greater access to the US’ land-based sector through AGT’s long-standing regulatory licences in multiple states – an expansion step that would be much more costly if embarked on than building from scratch.
For AGT, the company recently announced a $43.1m non-cash impairment of goodwill, which will be included in its 2025 financial results due to the underperformance of its North American business.
Continuing uncertainty over the company’s future, led by unrest among minority shareholders, only serves to further complicate AGT’s bid to navigate these headwinds.
