Could Ainsworth’s Proportional Bid Signal Governance Shakeup at AGI?
Kjerulf David Hastings Ainsworth has initiated an unconditional all-cash proportional takeover offer for 2.9% of Ainsworth Game Technology Ltd shares at $1.30 each, representing a significant premium over recent trading prices and a competing bid by Novomatic.
- Unconditional all-cash offer at $1.30 per share for 2.9% stake
- Offer price represents up to 30% premium over recent AGI trading prices and Novomatic bid
- Mr Ainsworth currently holds 7.27% and aims to increase stake to just under 10%
- Criticism of AGI’s undervaluation, especially of property assets
- Offer provides liquidity without brokerage fees while retaining majority shareholding
Background and Offer Details
Kjerulf David Hastings Ainsworth, a substantial shareholder in Ainsworth Game Technology Ltd (ASX – AGI), has launched an unconditional off-market proportional takeover bid to acquire 2.9% of the company’s shares he does not already own. The offer price is set at $1.30 per share, payable in cash, and represents a notable premium to AGI’s recent trading prices and a competing offer by Novomatic AG.
Mr Ainsworth currently holds approximately 7.27% of AGI’s issued shares and, if the offer is fully accepted, his stake would rise to just under 10%. This threshold is strategically chosen to avoid triggering regulatory complications related to AGI’s gaming licenses.
Premium and Strategic Rationale
The $1.30 offer price reflects a 28.7% premium to AGI’s closing price on 21 October 2025, a 24.1% premium to the volume weighted average price over the preceding 30 trading days, and a 30% premium to the $1.00 per share offer made by Novomatic earlier this year. Mr Ainsworth argues that AGI is significantly undervalued by the market, particularly pointing to the company’s real estate holdings in Nevada and Florida, which he believes have been materially understated in AGI’s financial statements.
Independent valuations commissioned by Mr Ainsworth suggest the Nevada property alone could be worth more than double its reported carrying value, while the Florida property also appears undervalued. Incorporating these valuations would increase AGI’s net assets substantially, supporting the fairness of the $1.30 offer price.
Implications for Shareholders and Governance
The offer is structured as a proportional bid, allowing shareholders to sell 2.9% of their holdings at a premium price while retaining the majority of their shares and exposure to AGI’s future performance. This approach provides liquidity without incurring brokerage fees or stamp duty for most shareholders.
Mr Ainsworth has expressed his intention to advocate for minority shareholders’ interests, including opposing any delisting of AGI from the ASX, pushing for the resumption of dividends, and supporting changes in AGI’s board and senior management. He has also indicated willingness to join the board temporarily if a vacancy arises, signaling a proactive stance on corporate governance.
Regulatory and Tax Considerations
The offer is unconditional and cash-based, with payment expected within one month of acceptance or 21 days after the offer period closes. Mr Ainsworth has addressed regulatory compliance, noting ongoing engagement with gaming regulators across multiple jurisdictions to satisfy licensing requirements associated with his increased shareholding.
Tax implications for shareholders vary depending on individual circumstances, with a general capital gains tax event triggered by acceptance. Non-resident shareholders should seek independent advice due to differing tax treatments and potential withholding obligations.
Next Steps and Market Outlook
The offer period remains open until 7 – 00 PM Sydney time on a date yet to be specified in early 2026, unless extended. Shareholders are encouraged to carefully review the bidder’s statement and consider the offer in light of their investment objectives. AGI is expected to respond with a target’s statement, which may provide further context or counterarguments.
Given Novomatic’s dominant 61.8% shareholding and stated intention not to accept the offer, the likelihood of competing bids appears low. However, Mr Ainsworth has left open the possibility of future proportional offers depending on market conditions and AGI’s strategic direction.
Bottom Line?
As the offer unfolds, investors will watch closely whether Mr Ainsworth’s bid reshapes AGI’s shareholder landscape and governance.
Questions in the middle?
- Will AGI’s board endorse or oppose Mr Ainsworth’s proportional takeover bid?
- How will the market respond to the valuation discrepancies highlighted by Mr Ainsworth?
- Could regulatory licensing hurdles limit Mr Ainsworth’s ability to increase his stake beyond 10%?