25th Apr 2014 08:42
LONDON (Alliance News) - Online gaming firm Bwin.party Digital Entertainment PLC Friday said it has sent a letter to its shareholders advising them to vote against SpringOwl's bid for additional directors.
Last week, Bwin.party said its shareholder, Gibraltar-based company SpringOwl Gibraltar Partners B Ltd, has called 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, run by Jason Ader, 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, also was assigned the right to appoint one director to the Bwin.party board, as long as its shareholding remained above 5%.
Instead SpringOwl put forward nominations for five directors for the board. As board representatives, SpringOwl 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 onto the Bwin.party board, the firm would have a third of its own people on the board.
However, Bwin.party said Friday that it is advising its shareholders to vote against the board appointment proposals.
"The board does not believe that it is in the best interests of the company and its shareholders and depositary interest holders for a minority shareholder, holding only 5.25% of the company's voting share capital, to nominate up to five directors onto the board," Bwin.party said in a statement Friday.
Bwin.party also said its concerned about the size of its board, should the proposed representatives be appointed, having previoulsy reduced its board membership down to nine directors.
"SpringOwl's proposal to increase the size of the board to 13 or 14 members would therefore result in a more unwieldy decision-making forum as well as add extra cost to the company," it said.
Bwin.party claims it has not had sufficient information and time to review and interview the four proposed nominees in order to determine their suitability and qualifications to serve as directors on the board.
Another one of Bwin.party's concerns is that all board representatives proposed are male. 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.
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.
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 regulated, 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.
Bwin.party shares were down 0.6% at 127.20 pence Friday morning.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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