Shares in Ainsworth Game Technology (ASX: AIN) were up around 33% at the open after revelations this morning that gaming technologies producer, Novomatic, is taking over the ASX-listed poker machine manufacturer.
Austria-based Novomatic — which holds a 52.9% interest in Ainsworth — has agreed to buy the outstanding 47.1% of shares in Ainsworth for $1 a share, representing a 35% premium to the company's last closing price of 74 cents.
Novomatic’s offer implies an equity value of $336.8 million and an enterprise value of $336.5 million, representing a multiple of around 7x enterprise value/FY 2024 earnings.
While Ainsworth is permitted to pay a dividend - which will be deducted from the cash consideration - Novomatic has made it clear its offer is "best and final and will not be increased".
After carefully evaluating the offer against the company’s medium and long-term growth prospects, the company's independent board committee (IBC) has unanimously recommended that the company's shareholders vote in favour of the deal.
"The proposal put forward by Novomatic, who is already the majority shareholder of [Ainsworth], represents a significant premium to long-term trading value and is compelling for [Ainsworth] minority shareholders," said Ainsworth chairman Daniel Gladstone.
"The IBC have carefully evaluated the proposed scheme consideration against the company's medium- and long-term growth prospects and alternative opportunities and has unanimously formed the view that the proposal represents attractive and certain value for [Ainsworth]'s minority shareholders."
While the deal still requires approvals from ASIC, the ASX, and the majority of Ainsworth shareholders, Novomatic has already received approval from the Australian Foreign Investment Review Board.
Today’s announced takeover offer from Novomatic follows a 44% decline in Ainsworth's profit from 2024 to $23.4 million.
For the 12 months ended 31 December 2024, the key market of North America showed the strongest performance contributing revenue of $147.0 million and representing 56% of Ainsworth's total revenue.
Ainsworth has a market cap of $331 million. The share price is down 20% over one year and up 14% year to date.
The stock’s shares appear to be in a near-term rally within a long-term bearish trend.
Consensus is Hold.
This article does not constitute financial or product advice. You should consider independent advice before making financial decisions.
