17th Apr 2014 11:31
LONDON (Alliance News) - Online gaming firm Bwin.party Digital Entertainment PLC Thursday said that its shareholder, Gibraltar-based company SpringOwl Gibraltar Partners B Ltd, is calling for a boardroom shuffle, as it wants to nominate four additional directors to the board of Bwin.party, in a bid to change the way the company is run.
SpringOwl, acquired a 6.1% share of the gambling group back in February, from the founder's trusts, however it later reduced its shareholding to 5.27%.
As part of the agreement, SpringOwl, which is said to adopt an active approach to its investments, was also assigned the right to appoint one director to the Bwin.party board, as long as its shareholding remained above 5%.
Bwin.party said Thursday that SpringOwl, run by Jason Ader, has put forward nominations for four directors for the board, not including the nomination right SpringOwl already holds associated with the share acquisition. This means that Ader's firm could potentially have as many as five members on the board, a move that might not sit well with shareholders.
As board representatives, SpringOwl has proposed venture capitalist Kalendu Patel, Francis Grady, US internet entrepreneur Michael Fertik, and Steven Rittvo, chairman and co-founder of consulting firm The Innovation Group.
Should SpringOwl get the five people on the Bwin.party board, the firm would have a third of its own people on the board, which could cause a shake-up with other shareholders.
So far Ader has not yet put forward a woman, although Bwin.party has said it remains committed to having at least two women serving on the board by 2015, and would like another female non-executive Director, having appointed Sylvia Coleman to the board last year.
However, this would not necessarily mean an increase in the size of the board, which currently stands at 10, but will go back down to nine, when Chairman Simon Duffy steps down at the company's annual general meeting on May 22, and is replaced by Philip Yea, who is currently a non-executive Director on the board.
"The company has subsequently received a formal requisition notice from SpringOwl?s legal advisers containing brief details of each candidate, a covering letter from Mr Jason Ader and formal notice to be put to shareholders," said Bwin.party in a statement.
The boadroom proposals will be discussed at the next annual general meeting on May 22, although Bwin.party said it will be circulating the details of SpringOwl?s proposed nominations to shareholders ahead of the meeting.
Last week, Bwin.party announced the appointment of Philip Yea as its new Chairman, while saying revenues in the first quarter were up on the previous quarter but down when compared with a year earlier.
The Gibraltar-based group was formed out of a merger in 2011 of PartyGaming PLC and Bwin Interactive Entertainment AG. In an attempt to recharge growth and profits, the group changed its business model, by increasing its focus on customers that generate the most value from nationally and, or taxed markets including Austria, Denmark, France, Germany, Italy Spain, the UK and the newly regulated US state of New Jersey.
The move has been paying off, but has hit revenues in the short-term as player numbers decline. It said the quarter to March 31 had been hit by a number of factors, including its shift in focus from 'volume to value'. Average daily net revenue was up 4% in the first quarter, versus the previous quarter, but was down 9% versus the prior year, hit by the shift in strategy, as well as internet-service-provider blocking in Greece, migration losses, and a challenging poker market in Europe.
Bwin.party shares were up 3% at 125.20 pence per share Thursday afternoon.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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