(Adds Bwin.Party comment)
LONDON May 5 American activist investor Jason
Ader on Monday claimed that his proposals to shake-up online
gambling company Bwin.Party by bolstering its board had
won support from other shareholders.
Ader, whose asset management firm SpringOwl is Bwin.Party's
fourth-largest shareholder, said in April that he wanted four
new directors elected to the company's board to tackle what he
describes as a continuing decline in the business.
Bwin.Party has urged shareholders to vote against the
proposal, saying it would make the board too large and hamper
Ahead of its annual meeting on May 22, Ader said in a
statement that Bwin's board had "overseen significant
shareholder-value destruction" through a failing strategy
resulting in the company underperforming compared with its
rivals. Ader also criticised a "runaway cost structure" and its
impact on profitability.
"We have received incredible support from the Bwin.Party
shareholders we have already spoken with and look forward to
more conversations as shareholders have the opportunity to add
sorely needed skills to the board of our company," Ader said.
He did not give details on the level of support SpringOwl
Ader has proposed that internet entrepreneur Michael Fertik,
lawyer Francis Grady, venture capitalist Kalendu Patel and
gaming industry expert Steven Rittvo be added to Bwin.Party's
existing nine-strong board.
A Bwin.Party spokesman on Monday said SpingOwl's comments
were focused on selective points of history and Bwin.Party
continues to recommend that shareholders vote against the
"SpringOwl has failed to offer any concrete proposals for
creating long-term value for shareholders and also demonstrates
a complete failure to understand the impact of the industry's
inevitable transition towards nationally regulated and taxed
markets," the company said.
Activist investors push for change at businesses they
believe are undervalued and can provide better shareholder
returns through a change in strategy or management. Ader, a
former Wall Street gaming analyst, battled with U.S slot-machine
maker International Game Technology last year, winning a
board seat for his firm.
Ader has said that the four new directors he wants elected
to Bwin.Party's board would provide significant expertise in
online gaming, technology and U.S. banking systems.
Bwin.Party has said it does not have sufficient information
or time to review the suitability of each candidate and that it
does not consider it to be in the interest of the company and
investors for a shareholder with a stake of 5.25 percent to
nominate so many directors.
In March, the company posted a 35 percent drop in full-year
earnings to 108 million euros ($149.75 million) because of
falling revenue, increased gaming taxes in Germany and start-up
costs in New Jersey.
($1 = 0.7212 Euros)
(Reporting by Neil Maidment; Editing by Louise Heavens and