Kjerulf Ainsworth, the son of company founder Len Ainsworth and a prominent minority shareholder in Australian slot machine supplier Ainsworth Game Technology (AGT), has warned against a move by controlling shareholder Novomatic to limit the takeover powers of minority parties, claiming the move works against the interests of existing shareholders of the company.
Ainsworth has also questioned AGT’s failure to pay dividends since 2018 – calling for a special meeting on the matter – while also nominating former AGT CEO Lawrence Levy as a potential non-executive director.
The comments form part of a second supplementary bidder’s statement filed with the ASX on Tuesday – part of the proportional takeover bid recently issued by Ainsworth which could see him increase his stake in the company from 8.24% to 13.29%.
AGT last week announced details of its upcoming Annual General Meeting, including a proposal to renew proportional takeover provisions that Ainsworth says are aimed at restricting the ability of other parties, including himself, to offer AGT shareholders an opportunity to sell a portion of their shares without prior shareholder approval because Novomatic would have the ability to block such offers.
“This could deny [AGT] shareholders the opportunity to receive offers such as those I have recently made and entrench existing control by denying potential acquirers such as myself one avenue for share acquisition – an avenue which operates fairly among all [AGT] shareholders while allowing capping of the number of shares potentially acquired by the bidder,” he wrote in the statement.
Ainsworth also questioned the failure of AGT to declare any dividends since 2018 despite what he describes as strong financial results and revenue growth across all major regions.
“During this period, [AGT] has cited various reasons for not paying dividends, including commercialization priorities and its financial position,” he said. “While I recognize the importance of prudent capital management, I consider that the continued withholding of dividends in the context of such results is difficult to justify and raises a legitimate question as to whether the Board has appropriately balanced reinvestment priorities against its responsibility to return value to shareholders.
“Although the deadline for proposing resolutions for the 2026 Annual General Meeting has now passed, I intend to requisition a meeting to consider a resolution to amend [AGT] constitution to provide for the payment of a specified level of dividends out of company profits, reflecting my firm view that shareholders should not continue to be deprived of a return on their investment for what is, in my opinion, an unjustifiable period.”
Separately, Ainsworth is pushing for the appointment of former AGT CEO Lawrence Levy to return as a non-executive director of the company, with the potential to have a significant say in the appointment of a new CEO following the recent departure of Harald Neumann.
IAG understands that Levy is viewed favorably by a faction of AGT shareholders and other stakeholders, led by Ainsworth, which is rallying against the company’s current Board of Directors and management team.
Ainsworth has nominated Levy to be appointed as a non-executive director.
“Mr Levy brings significant institutional knowledge of [AGT’s] business, strategy and governance framework,” Ainsworth said. “He has extensive industry experience, proven leadership capability and a strong reputation for integrity and sound judgement, having previously served as CEO of [AGT] from 1 July 2019 to 10 September 2021 (having resigned for personal reasons).
“[I consider] that Mr Levy would provide valuable continuity and strategic insight and contribute to strong governance as [AGT] progresses through its next phase of development.”
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