LONDON, April 25 Online gambling company
Bwin.Party on Friday urged its shareholders to vote
against a proposal from American activist investor Jason Ader to
elect four new directors, saying it would make the board too
large and hamper decision making.
Ader, whose asset management firm SpringOwl is Bwin's
fourth-largest shareholder, said last week that the addition of
the new executive directors would tackle what he describes as a
continuing decline in the business, bringing significant
expertise in online gaming, technology and U.S. banking systems.
Activist investors push for change at firms they believe are
undervalued and can provide better shareholder returns via a
change in strategy or management. Ader, an ex-Wall Street gaming
analyst, battled with U.S slot-machine maker International Game
Technology last year, winning a board seat for his firm.
Ahead of its annual meeting on May 22, Bwin said it does not
have sufficient information or time to review the suitability of
each candidate, and believed it would not be in the interest of
the company and investors for a shareholder with a stake of 5.25
percent to nominate so many directors onto the board.
It added that the addition of four new directors would
increase the size of the board to 13 members, a number the
company has already come down from after it was deemed too
large, costly and unhelpful to the decision-making forum.
Bwin said SpringOwl's push for four new members had not been
supported by any constructive views on how to improve the
business and that it should exercise its existing right to
nominate an individual appointment to the board.
Last month Bwin posted a 35 percent fall in full-year core
earnings to 108 million euros ($149.25 million) due to falling
revenue, increased gaming taxes in Germany and start-up costs in
According to Reuters data, Bwin is trading at 17.4 times
expected earnings over the next 12 months, versus 18.1 times for
rivals 888 and 21.3 times for Betfair.
Shares in Bwin were trading at 127.5 pence at 0825 GMT, down
around 1.5 percent on a year ago versus a 15 percent fall for
shares in 888 and a 15 percent gain for Betfair shares.
Bwin said that following Philip Yea's appointment as
Chairman elect on April 9, a process to evaluate the performance
and structure of the board had begun and that the four nominees
would be interviewed to determine their suitability should the
review identify any need for change to the board's membership.
($1 = 0.5953 British Pounds)
($1 = 0.7236 Euros)
(Reporting by Neil Maidment; Editing by Elaine Hardcastle)