Kjerulf Ainsworth Pushes Back Against Novomatic’s Growing Control of ATG

Australian gambling company Novomatic, a majority shareholder of Australian slot machine supplier Ainsworth Game Technology (AGT), apparently wants to limit the takeover powers of minority parties. However, Kjerulf Ainsworth, the son of company founder Len Ainsworth and a prominent minority shareholder in ATG, has warned against such a move, arguing that this would be a violation of the interests of existing shareholders of the company.

Ainsworth Speaks Against Novomatic’s Attempt for More Influence in ATG

According to Ainsworth, the move could deny AGT shareholders the opportunity to receive offers and could entrench existing control by limiting potential acquirers like himself from accessing a way for share acquisition. Ainsworth also questioned AGT’s failure to declare any dividends since 2018 despite what he described as strong financial results and revenue growth across all major regions.

He noted that during this period, AGT had cited various reasons for not paying dividends, including commercialization priorities and its financial position. While acknowledging the importance of prudent capital management, he argued that the continued withholding of dividends in light of such results was difficult to justify. It also raised a legitimate question as to whether ATG’s Board had appropriately balanced reinvestment priorities against its responsibility to return value to shareholders.

These comments come just a couple of months after Novomatic failed to acquire the rest of ATG back in February. Currently, the company owns about two-thirds of ATG. For comparison, Ainsworth’s current stake in ATG is just over 8%.

What Else Has Ainsworth Been Up to Recently?

Questioning Novomatic’s decisions isn’t the only thing that Ainsworth has been busy with lately. He has also been advocating for the return of former AGT CEO Lawrence Levy as a non-executive director. If this goes through, it could give Ainsworth considerable influence over the selection of a new CEO following the recent departure of former chief executive Harald Neumann.

Considering that recently Ainsworth submitted a bid to acquire 5.5% of ATG’s ordinary shares for AUD 1.30 ($0.92) a piece, this could be viewed as another tool used in the seeming struggle between Novomatic and Ainsworth for influence in the company. It should be noted that, if the bid succeeds, Ainsworth would increase his stake in the company from 8.24% to 13.29%.

According to Ainsworth, Levy brings significant institutional knowledge of AGT’s business, strategy, and governance framework. He added that Levy has extensive industry experience, proven leadership capability, and a strong reputation for integrity and sound judgment, having previously served as CEO of AGT between 2019 and 2021 before resigning for personal reasons.

In other news regarding Novomatic, recently, Austrian prosecutors accused former Novomatic execs in a bribery case. The accused include Harald Neuman, who we’ve mentioned above, and Johann Graf, founder and owner of the company.