Ainsworth Game Technology’s largest minority shareholder, Kjerulf Ainsworth, has called for the resignation of the company’s chairman, Danny Gladstone, and Company Secretary, Mark Ludski, in the wake of a failed takeover bid by controlling shareholder Novomatic AG.
In comments sent to Inside Asian Gaming on Tuesday, Ainsworth – who now holds a 7.46% stake in AGT following closure of his own proportional takeover offer – described Novomatic’s bid as a “debacle” while also blaming Gladstone for a series of what he describes as “terrible decisions” over the past year.
Novomatic’s takeover bid was launched in August after it terminated a previous scheme of arrangement for 100% ownership of AGT when it became clear that a block of smaller AGT shareholders had rallied enough support to block the transaction. The bid closed earlier this month with Novomatic having increased its stake from 52.9% to 67.39% – well below the 75% it needed to take AGT private.
Commenting on the failed bid, Ainsworth said, “The past year has been a nightmare for AGT’s minority shareholders, and it’s time for the chairman to take responsibility for the terrible decisions he has made and the damage he has done to the company’s reputation and to its long-suffering minority shareholders.
“Mr Gladstone championed a completely unacceptable takeover and privatisation bid by the largest shareholder, Novomatic AG, that materially undervalued AGT and was never going to succeed, at a cost of nearly AU$1.6 million (US$1.1 million).
“The board and company secretary knew last year that they didn’t have the support of minority shareholders, and they pushed this doomed deal regardless. Heads should roll for that debacle alone.”
Ainsworth also pointed to a recent article published by local media outlet the Australian Financial Review alleging Gladstone and Ludksi had received undeclared bonuses of AU$10 million and AU$5 million (US$7.1 million and US$3.55 million) respectively following Novomatic’s initial acquisition of a controlling stake in AGT in 2018, and to the fate of former AGT CEO Harald Neumann who stepped down late last year after failing to have his license renewed by the Nevada regulator.
According to Ainsworth, Gladstone had also “overseen the announcement of significant financial impairments while incurring unnecessary expenditure including company-funded global first-class travel” during his tenure.
“Shareholders haven’t seen a dividend since 2018, yet the chairman and company secretary are treating the company like a concierge that can deliver them every perk and allowance available,” he stated.
“These are officers of the company with a fiduciary duty, who are enriching themselves personally while trying to hang onto their jobs in the face of shameful and destructive failures of leadership.
“There is simply no other option; they have to go.”
IAG has reached out to AGT for comment.
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