Australia-listed slot machine maker Ainsworth Game Technology Ltd says it received on Wednesday a “proportionate offer” from Kjerulf Ainsworth, a son of the company’s founder, for a takeover of “2.9 percent of each shareholder’s shares in Ainsworth”.
Mr Ainsworth said in a letter with Wednesday’s date – included in Ainsworth Game’s Thursday filing to the Australian Securities Exchange – that he was offering AUD1.30 (US$0.843) per share.
That is 30.0 percent more than the “off market” and “unconditional” takeover bid of AUD1.00 per share made in August by Ainsworth Game’s majority owner, Austria’s Novomatic AG, for the shares in the slot maker it does not already own. Ainsworth Game has said an independent board committee has already recommended acceptance of the Novomatic offer.
The Novomatic group and its founder and owner, Johann Graf, now control 61.5 percent of Ainsworth Game’s shares, according to an October 2 filing.
Mr Ainsworth’s Wednesday letter stated: “If all other shareholders accepted the offer, I would hold approximately 9.9 percent of the ordinary shares in Ainsworth Game.”
Mr Ainsworth said his offer represented a 28.7 percent premium to Ainsworth Game’s closing price on Tuesday (October 21), the trading day prior to his letter, and a 24.1 percent premium to the volume weighted average price of Ainsworth Game shares over the 30 trading days ending October 21.
Ainsworth Game stated in its Thursday filing on the matter: “Novomatic has indicated to the company that it does not intend to accept the proposed proportionate offer.”
“This would mean the maximum number of shares Kjerulf Ainsworth could potentially acquire” under his proposal “would be less than approximately 1 percent of the total number of shares in Ainsworth”.
Ainsworth Game further noted that it had not yet “received a bidder’s statement, or further information necessary for the independent board committee to assess” the offer, “such as a proposed timeline, or disclosure of funding sources and an update on the status of regulatory disclosures and licensing”.
As a result, Ainsworth Game shareholders “should take no action in relation to the proposed proportionate offer at this stage,” the firm added.
Ainsworth also stated: “As Kjerulf Ainsworth’s holding of Ainsworth shares is now more than 5 percent… he is required to submit personal disclosures or apply for licensure under gaming laws and regulations in a number of gaming jurisdictions.”
It had already been widely reported in the Australian media that Mr Ainsworth has been opposed to Novomatic’s buyout offer to the minority stockholders, on the basis that Novomatic undervalues Ainsworth Game.
He stated in his Wednesday letter: “While a proportional takeover bid is not required in the current circumstances, I wish to make the offer price available to all shareholders, while ensuring my holding in Ainsworth Game remains below 10 percent, so as to avoid triggering complications under Ainsworth Game’s regulatory licences.”
The founder’s son added: “I believe Ainsworth Game is currently significantly undervalued, and that it [the proportionate offer] represents an excellent investment opportunity in an industry that continues to grow globally.”
He further noted: “The company’s asset backing suggests an offer price of AUD1.30 is more fair and reasonable than offers that are currently available on- and off-market.”
“The offer demonstrates my long-term interest in and commitment to the future of Ainsworth Game,” stated Mr Ainsworth. “If a board seat becomes available, I will agree to becoming a board member for a fixed period of 12 months to assist in sorting out the issues the company is facing,” he added.
