Ainsworth Shareholders Say Novomatic’s Takeover Undervalues the Company

Novomatic’s plan to acquire the remainder of gaming machine manufacturer Ainsworth Game Technology and take the company private might fall through amid shareholder dissent. Major stakeholders criticized Novomatic’s deal, saying that it has put them in a difficult position.

Novomatic Seeks to Acquire Ainsworth

Novomatic, which is among Europe’s largest gaming tech giants, set out to acquire the rest of Ainsworth and take the company private earlier this year. In April, the former group revealed that it had entered into a scheme implementation deed with Ainsworth, agreeing to acquire its remaining shares for a best and final cash consideration of $1.00 per share through a scheme of arrangement.

For reference, Novomatic acquired a 52.9% majority stake in Ainsworth several years ago. After some time as the ASX-listed business’s majority investor, Novomatic decided to go further and solidify its control over the company.

Unfortunately for Novomatic, it seems like not all of Ainsworth’s shareholders agree with the proposal.

Major Shareholders Reject the Deal

According to a report by the Australian Financial Review (AFR), several major shareholders, including Allan Gray, Kjerulf Ainsworth, and Spheria Asset Management, indicated that they preparing to reject the proposal. The three investors collectively own a 20% stake in Ainsworth and could potentially change the fate of the deal.

For context, the deal will not go through if the shareholders behind 25% of the company’s stock reject it.

In addition to that, two additional investors tipped off the news outlet that they disagree with the proposal, although they preferred to remain anonymous.

Allan Gray, Kjerulf Ainsworth, and Spheria Asset Management have claimed that the deal undervalues the company, despite it representing a 35% premium to pre-announcement share prices. They asserted that the price fails to take the whole property portfolio into account.

The Australian Financial Review contacted Ainsworth, which noted that it is still too early to comment on the deal. A spokesperson told the news outlet that the company continues to monitor the situation.

Shareholders are set to vote on the matter on August 29.