A U.S.-based shareholder of Australian slot supplier Ainsworth Game Technology is accusing Ainsworth of deliberately devaluing its own stock, possibly to force a full sale to the Austrian gaming giant Novomatic AG.
In an interview with Australian Financial Review, David Kanen of Kanen Wealth Management, which holds around 8 million Ainsworth shares, alleged the business was “severely undervalued” after Ainsworth CEO Harald Neumann told investors a secondary listing in the United States was not an option.
“I believe our CEO talked the stock down,” Kanen said. “By limiting themselves to being in obscurity, solely on the Australian exchange… they’re missing a much bigger sized audience. Remaining in obscurity results in low volume, lower valuation and lack of price discovery, no U.S. research coverage.”
According to the AFR report, Neumann claims a secondary listing would cost the company around AU$10 million but a number of shareholders, including Karen, dispute this, putting the cost at less than AU$2 million.
“It was a complete falsehood for him to say AU$7 million to AU$10 million,” Kanen told the publication. ”I’ve been a patient shareholder for approximately three years. Harald knows U.S. is a more liquid market with more investors that could potentially buy the stock.”
At the heart of the dispute is Ainsworth’s announcement last November that it had appointed Macquarie Capital as its financial advisor with a view to exploring “potential opportunities” that may enhance shareholder value. The appointment has led to rumors that a sale is imminent, with some suggesting Novomatic.
“They’ve hired Macquarie to sell the company prior to realizing a fair value on the public market, thereby keeping (Ainsworth’s) price depressed,” Kanen told AFR. “If there’s a deal from Novomatic that undervalues the company, absent an up-listing to the U.S., we would have to vote it down.”
