Minority investors plan to scuttle Len Ainsworth sale

New article on the AFR.

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Ainsworth Game Technology independent directors are challenging the status of the shareholdings of family members of founder Len Ainsworth and whether they should be able to vote on the controversial sale of Mr Ainsworth's 53 per cent stake in the gaming group worth $473 million.
If the strategy committee set up by the directors determines that Gretel Ainsworth, Mr Ainsworth's wife, and any of his children are unable to vote their shares, it opens the way for minority investors to scuttle the deal, which will be voted on at an extraordinary general meeting within three months.
The deal requires 50 per cent of the votes cast by minorities to approve the deal with Mr Ainsworth exempt from voting at the meeting.
It is thought Ainsworth family members could account for up to 10 per cent of the company's shares.

Mr Ainsworth said the status of his wife as a minority shareholder was being studied and he is unsure of the outcome.
"We don't know at this stage," he said. "We think maybe not, maybe so in terms of the vote. But she won't be selling her shares anyhow."
Ainsworth director Graeme Campbell, who also sits on the boards of the Lantern Hotel Group and Liquor Marketing Group, is the lead independent director. He did not return calls from The Australian Financial Review.
Mr Ainsworth's $473 million sale has been opposed by some minority investors, including Watermark Capital, which argues the sale fails to protect their interests and sells the shares without a full takeover premium.

Watermark Capital investment analyst Joshua Ross has said the fund may vote against the transaction in favour of a full sales process for the company. It is understood several Australian institutional investors, along with a US hedge fund, will look to engage other Ainsworth shareholders to fight the proposal.
However, the board has recommended the transaction to investors.
Mr Ainsworth told Fairfax Media the deal with Novomatic is a natural fit.
"In my opinion it will result in us having a larger factory here and safeguarding the futures of Ainsworth employees," he said on Friday. "Our objective is to expand and we can do it that much better with Mr Graf and Novomatic on board. He'll get the money but does it matter? Not really."

The pokies magnate also revealed that he would not sell to a rival bidder despite the protests of some minority investors.
"If someone wants to get a conglomerate together and make an offer, well they are not going to get very far if they can't lay their hands on my 53 per cent stake plus another 10 per cent holding which my wife has," he said. "It's very tightly held so they'd be spinning their wheels."
The transaction will also be subject to an independent experts report, which will consider whether the transaction is fair value.
Mr Ainsworth has struck an initial deal to sell his 172.1 million shares at $2.75 a share, netting the entrepreneur more than $470 million.

While Novomatic will be handed a sizeable footprint on the pokies market should the sale receive approval, sources close to the process said it could be up to 12 months before the Austrian company receives probity clearances from some US gaming regulators where Ainsworth already operates.