11 August 2025: An open letter to Ainsworth Shareholders
Dear Fellow Shareholder,
I am writing to let you know why I intend to vote NO to the offer from Novomatic AG (Novomatic) to acquire our shares for a disappointingly low $1[1] per share (the Scheme).
As you may be aware, Novomatic acquired 52.9% of AGI from Len Ainsworth in 2018 for $2.75 per share. According to the information in its most recent disclosures[2], AGI is profitable and well-placed for growth.
Curiously, however, under the last six financial years of Novomatic’s majority ownership, no dividends have been paid. Shareholder returns have been spent on an acquisition, research and development (R&D), and debt reduction. Over that time, AGI’s share price has fallen nearly 64 per cent.
Novomatic is proposing to buy the remaining shares in AGI at slightly more than a third of its original purchase price despite AGI showing good potential for growth according to its own announcements.
In my opinion, this sale would deprive minority shareholders of the opportunity to benefit from a company that has invested their returns in “further accelerating growth objectives” in “future periods”[3] right at the time the company has launched the outstanding new Raptor Cabinet and other new games.
Given the above, you may already have decided to vote NO to Novomatic’s Scheme. If you are undecided, this letter outlines my opinion of three reasons why I intend to vote NO to Novomatic’s offer:
1: AGI is undervalued at $1 per share
2: Novomatic’s conduct raises questions
3: AGI has excellent prospects
1 AGI is undervalued at $1 per share
I have been a minority shareholder in AGI for several years, and it is clear from reading AGI’s disclosure over this period that:
AGI’s share price has been depressed. AGI has not paid a dividend since 2019, despite being profitable every year except 2023 and during COVID (2020-21). The company has: vastly expanded R&D expenditure to 17% of revenue; completed the acquisition of MTD Gaming Inc; accelerated depreciation; and used cash to repay all company debt, depressing AGI’s reported performance.
AGI’s property is undervalued. Property assets are valued at USD$44.5M in AGI’s 2024 Annual Report, which is their historical purchase price, after depreciation and adjustment for currency fluctuation. An independent valuation carried out in late June 2025 by Valbridge Valuers valued AGI’s property assets at USD$76.0M. This represents a 69.6% difference – or $0.19 per share – from the value disclosed to the market, an anomaly not noted by the Scheme’s Independent Expert Report [4].
AGI is performing well. The Independent Expert Report suggests that AGI will make a Net Profit After Tax of AUD$49M in 2025, which represents ~AUD$37.5M in profits in the nine months since the last financial report. This alone is a value of more than $0.11 per share. The company has a very strong Net Asset backing with almost no debt. Even based on the 2024 Annual Report, AGI shares at $1.00 are trading at an 8.4% discount to its Net Asset Backing and only a 12% premium to Net Tangible Assets.
2 Novomatic’s conduct raises questions
I believe Novomatic and AGI have questions to answer regarding the matters above, as well as:
AGI’s CEO Harald Neumann is the former CEO of Novomatic. Mr Neumann is the subject of an ongoing corruption probe[5] concerning his alleged conduct while CEO of Novomatic, and separate tax evasion charges related to two “personal”, €1M payments he allegedly received in 2018 and 2019 from the founder and owner of Novomatic AG[6].
The optics of Novomatic appointing Mr Neumann to lead AGI, Mr Neumann managing the company through a 64% fall in investor value, and then selling AGI to Novomatic for a low price, are unfavourable at best.
Expenditure by AGI, which includes related-party transactions in favour of Novomatic and significant outflow of cash on R&D for which there is little corresponding intellectual property development recorded to date.
The timing of the Scheme of Arrangement. AGI has used earnings to repay its debt in the past three years. The use of profits to finalise the repayment of debt without any dividend to shareholders coincides with the timing of the Novomatic offer. Investors have not received a report on the performance of the company since December 30, 2024.
3 AGI has excellent prospects
In contrast to the tone of the Scheme Booklet, AGI’s business is highly competitive and does not need a takeover, nor Novomatic, to survive or thrive:
the global slot machine market was valued at ~USD16.8billion in 2024 and is projected to reach USD28.3billion by 2034[7]. AGI is currently the world’s 7th largest manufacturer by revenue[8], with significant room for growth and an inherent advantage under the USA’s global tariff program
AGI has strong cashflow, good profit margins, and several thousand machines profitably on participation in leading gaming facilities
AGI’s investment in R&D is likely to reap future rewards through market-leading products such as the expansion of Raptor cabinet placement and the release of compelling new games.
Next steps
Like my father, I believe in treating shareholders as business partners who share the gains of a company. Despite Novomatic making all the right noises about shared growth[9] when buying the company, I do not believe they have lived up to their stated commitments to date. Novomatic is seeking to squeeze out shareholders at precisely the time the company is set for dramatically improved results, and this Scheme prevents AGI shareholders from realising substantial ongoing future growth in the value of AGI.
For the reasons above, I intend to Vote NO to Novomatic’s proposal.
I encourage you to contact me at Kjerulf.ainsworth@protonmail.com , via the Hot Copper forum or confidentially via the below contact form if you would like to discuss the Scheme or anything relating to the above.
Yours Sincerely,
Kjerulf Ainsworth
[1] Scheme of Arrangement booklet: https://www.agtslots.com/investor/2025scheme
[2] Reports available at https://www.agtslots.com/investor/investor-documents/asx-announcements?page=3
[3] Page 28, AGI Directors’ Report for the Year Ended 31 December 2024
[4] See 25/7/25 at https://www.agtslots.com/investor/investor-documents/asx-announcements
[5] https://www.abc.net.au/news/2025-06-12/boss-of-australian-pokies-giant-under-corruption-investigation/105410078
[6] https://www.afr.com/companies/games-and-wagering/ainsworth-ceo-in-tax-probe-but-company-says-it-s-a-personal-matter-20250714-p5meqe
[7] Based on data from Global Market Insights projecting a CAGR of 5.6% (https://www.gminsighs.com/industry-analysis/slot-machine-market)
[8] Based on publicly disclosed revenue for Aristocrat Leisure, Light & Wonder, Novomatic, International Game Technology, Konami Gaming, Everi Holdings and AGI.
[9] https://www.afr.com/markets/equity-markets/austrias-novomatic-plays-the-long-game-for-ainsworth-jackpot-20160506-gonqff
