Ann: AGI Release re MTD Acquisition, page-8

Originally posted by Len

When Novomatic bought into AGI I thought that they might use their approval in Nevada to open a Casino and fill it with Ainsworth machines. Not the old ones, but newly designed ones. That has not happened yet, so now I am wondering why they bought in. Have you any thoughts on what Novomatic is up to?

Great question. Novomatic purchased their shares in what 16/17? I recall at the time AGI making a big song and dance about all the great "synergies" that would flow (have a look at some of the announcements around that time). As far as I can tell Novomatic doesn't appear to have stepped in to help them out in any way other than to put their own man in as CEO. I thought that Novomatic's man might have been the catalyst for a major overhaul and to execute on Novomatic's grand plans, but as I pointed out earlier the new CEO has been in the job for almost 12 months and it seems like it's business as usual--and if you look at that chart in my last post it would appear the market thinks the same. I acknowledge it takes time to turn the titanic around, but here we are twelve months in with a new CEO and I for one am struggling to understand what it is they are planning to do.

I can't recall exactly what Novomatic paid for their 51% but I think it was around $2.70 (I stand to be corrected). Here we are at close yesterday sitting at $0.44 and UBS this week coming out stating their price target is $0.37. This dramatic and continued slide south in price over the years since Novomatic became a shareholder suggests to me they aren't really concerned and aren't up to anything. Maybe Novomatic have a big fat short position