Ainsworth Game Technology board backs takeover proposal from majority shareholder Novomatic

The board of Ainsworth Game Technology (ASX: AGI) has recommended shareholders accept a $336.8 million unsolicited takeover proposal from majority shareholder Novomatic.

Novomatic currently holds 52.9% equity in Ainsworth and the takeover would see it acquire the remaining 47.1% of shares on issue.

Under the all-cash agreement, Novomatic will pay Ainsworth shareholders a consideration of $1 per Ainsworth share, representing a premium of 35% to Ainsworth’s last closing price and 28% to the six-month volume-weighted average price to 24 April.

Equity value

The consideration implies an equity value for Ainsworth of $336.8m and an enterprise value of $336.5m.

This is an approximately sevenfold multiple of the company’s $48.2m EBITDA for financial year 2024.

Certain shareholders may realise additional value through the payment of one or more fully-franked dividends, which may be declared and paid at the discretion of the Ainsworth board of directors prior to the acquisition.

Gaming technologies

Established in 1980, Novomatic is one of the world’s largest producers of gaming technologies, managing more than 221,000 gaming and video lottery terminals through a rental model or through more than 2,100 casinos, slot arcades, bingo facilities and sports betting outlets in over 50 countries.

The company’s integrated product offering has an emphasis on research and development and it currently has over 31 technology centres in 18 countries.

Novomatic develops more than 200 new game variations and designs every year and currently holds over 5,000 intellectual property rights across the globe.

Board recommendation

Ainsworth chair Daniel Gladstone said the board had recommended shareholders vote in favour of the Novomatic takeover in the absence of a superior proposal.

“The proposal put forward by Novomatic represents a significant premium to our long-term trading value and is compelling for our minority shareholders,” he said.

“Our independent board committee has carefully evaluated the offer against our medium- and long-term growth prospects and alternative opportunities and has unanimously formed the view that the offer represents attractive and certain value for our minority shareholders.”

Regulatory approval

The Australian Foreign Investment Review Board has already given its approval to Novomatic’s proposed takeover.

The company will fund the deal through a combination of existing cash reserves and third-party debt financing.

The Ainsworth board has advised shareholders to take no action at this point in time.