UK-listed online gambling operator Bwin.party digital entertainment has urged its shareholders to reject a bid by activist investor Jason Ader to nominate four nominees to the company’s board of directors. Ader, who holds slightly over 5% of Bwin.party via his investment vehicle SpringOwl, has the right to appoint his own representative to Bwin.party’s board. Earlier this month, Ader proposed four nominees whose technology and finance backgrounds convinced him they were the ones to help whip the underperforming online gambling company into shape.
On Friday, Bwin.party’s brain trust issued a note to investors saying it “does not believe that it is in the best interests of the company … for a minority shareholder … to nominate up to five directors onto the Board.” Bwin.party justified its decision in part because it has been “provided with very little information” on Ader’s nominees, which leads one to assume that when Google imposed a search penalty on Bwin.party domains for dodgy link-building, they also eliminated the ability of Bwin.party execs from using Google to find info on things they don’t know.
Bwin.party also believes the additional directors would make their board a bloated behemoth, i.e. the same size it was when Bwin and PartyGaming merged back in 2011, before they whittled themselves down to their current nine members. Bwin.party also objects to the fact that all four of Ader’s nominees are men and the company is already under pressure to add one more woman to their existing boys club. Finally, Bwin.party is leery of the fact that Ader won’t tell them his specific plans for putting Bwin.party back on a path to profitability. Investors will vote on the matter at Bwin.party’s AGM in Gibraltar on May 22.
Meanwhile, Ader has launched a new SaveBwinParty.com website that expounds on his public statements regarding Bwin.party’s failure to increase shareholder value. The site’s homepage graphically illustrates how far the company’s worth has fallen since Bwin and PartyGaming announced their intention to merge, while making unfavorable comparisons with industry competitors and criticizing CEO Norbert Teufelberger and other top execs for cashing in lucrative bonuses while shareholders went hungry.
Ader invites Bwin.party investors “who have borne the economic cost of this value destruction” to visit the site for updates ahead of the AGM so that they can make an informed decision when they vote on his proposed nominees (bios of which are available on the site). Ader is quoted as saying change is required now because Bwin.party “has suffered from FAILED EXECUTION, a FAILED MERGER and FAILED OVERSIGHT under the current Board of Directors.”