Len Ainsworth’s wife, Margarete, has withdrawn from voting her 9% stake in Ainsworth Game Technology at the June 27 shareholders' meeting ahead of a decision by the Takeovers Panel. This wasn’t much of a surprise, and given that the share price barely twitched on the news, the market doesn’t seem to think so either.
For Len to sell his 53% stake in the company to Austria-based Novomatic for $2.75 per share now requires a majority of the remaining 38% of shareholders to approve the deal. With two major shareholders – Watermark and Fortress – opposed to the sale, it won’t be easy to get it across the line. Novomatic may be forced to make a bid for the company as a whole.
While there are potential benefits to the sale, most of them go to Novomatic, which would gain access to the lucrative North American market. We consider it unfair to minority shareholders for reasons discussed in Ainsworth: Interim result 2016, and we continue to recommend you vote against the deal. HOLD.
Note: The Intelligent Investor Growth Portfolio and Equity Income Portfolio own shares in Ainsworth Game Technology. You can find out about investing directly in Intelligent Investor and InvestSMART portfolios by clicking here.