Bwin.party shareholders advised to reject SpringOwl proposals
Company argues Jason Ader-led investment firm has not provided sufficient information on its four Board nominations
Bwin.party has spoken out against the Board nominations made by activist investor SpringOwl, recommending that its shareholders reject them at next month’s AGM.
Led by former US gaming analyst Jason Ader, SpringOwl made four nominations to the operator’s Board earlier this month, after claiming that bwin.party CEO Norbert Teufelberger should “surround himself with better talent”.
Ader owns a 5.25% shareholding in bwin.party and has been vocal in his criticism of the firm’s management and strategic decisions in recent years.
However bwin.party said this morning that after reviewing the nominations and consulting with leading shareholders, it recommends a vote against the SpringOwl proposals and said the investor had not provided any insight into its strategic vision for the operator.
“SpringOwl’s plan to add four, possibly five additional directors to the Board has not been supported by any constructive views on the Company’s future, business strategy or how it intends to improve the Group’s prospects,” bwin.party said.
Explaining its decision, bwin.party said it had been provided with “very little information” on each of the four nominees. It said this was vital as if appointed to the Board, a nominee may have to be licensed as a qualifying individual under state online gaming regulations in the US.
The operator added that SpringOwl is seeking to by-pass the normal appointment process, “putting at risk the ability of the Board to operate as a unified and effective forum in the best interests of all shareholders and depositary interest holders”.
Concerns were also raised over the number of nominees made my SpringOwl. If its four nominees are voted onto the board at next month’s AGM, the board would increase from nine to 13 members, a number which could rise again should SpringOwl make its final entitled nomination.
“Following the completion of the merger between PartyGaming Plc and bwin Interactive Entertainment AG in March 2011, the Board comprised 13 directors, a number that the Board and leading shareholders viewed as too large,” bwin.party said.
“As a result, the Board embarked on a process that has successfully reduced its membership 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.”
Other concerns included that all four nominations were male and therefore did not fall in line with bwin.party’s move to adhere to UK and European corporate governance best practice and its intention to appoint at least two women to the Board by the end of 2015.