An Independent Board Committee prepared by the Board of Directors of Ainsworth Game Technology (AGT) has unanimously recommended that shareholders accept the proportional offer put forward by Kjerulf Ainsworth, the son of company founder Len Ainsworth and currently holding 8.24% of AGT shares.
Ainsworth, who ran a similar proportional takeover offer last year, announced in mid-March that he was launching a second proportional bid in an effort to further lift his stake in Australian slot machine supplier Ainsworth Game Technology (AGT). The all-cash unconditional offer is for 5.5% of ordinary shares for AU$1.30 per share, which if fully filled would lift his stake to 13.29%.
It is also the latest chapter in Ainsworth’s ongoing dispute with Austrian gaming giant Novomatic AG, which last year lifted its controlling stake in AGT to 67.39% via its own takeover offer. Ainsworth had rallied against Novomatic completing a full takeover, arguing the AU$1.00 per share it was offering undervalued the company, and recently issued a public call for the resignation of AGT Chairman Danny Gladstone.
Nevertheless, in a chairman’s letter filed with the ASX on Friday as part of the Target’s Statement, Gladstone revealed that the Board had established the Independent Board Committee comprising only its independent directors and not AGT’s two Novomatic representatives in order to avoid any conflict of interest.
He added that, having reviewed the proportional offer, the Independent Board Committee considers the offer price to be at an acceptable premium and therefore unanimously recommends that shareholders accept the offer.
Reasons given include that the AU$1.30 per share represents a 23.8% premium to the closing price on the last trading day before the announcement date and a 23.6% premium to the one-month volume weighted average price of AGT shares traded up to the last trading day before the announcement date.
It also provides shareholders with all-cash, certain consideration for 5.5% of their holding, without the uncertainty of selling on-market at a fluctuating price.
“Ainsworth Shareholders who hold an Unmarketable Parcel who wish to exit their AGT investment entirely should accept,” Gladstone added. “The proportional offer will extend to their entire holding at the offer price of AU$1.30 per AGT share.”
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