SpringOwl has hit back at the board of bwin.party digital entertainment after the online gaming operator urged its shareholders to reject all resolutions proposed by the activist investor, including the nomination of four directors to the company's board.
bwin.party warned shareholders last week that the nomination of the directors would not be in the company’s best interests, leading SpringOwl to counter with claims that it enjoys strong support from other bwin.party shareholders.
SpringOwl's proposed directors, comprising internet entrepreneur and reputation management specialist Michael Fertik; lawyer Francis Grady of the law firm Grady & Riley LLP; venture capitalist Kalendu Patel; and Steve Rittvo of advisory and investment company the Innovation Group, will seek election to the board at the operator’s annual general meeting on May 22nd.
Ader's response to the bwin.party advice was to ratchet up pressure on the incumbent board.
“Our nominees are committed to reversing the years of value destruction overseen by the incumbent board that have resulted in a staggering decline of approximately 60 per cent in bwin.party’s share price since announcement of the merger in July 2010,” he said. “For too long, the incumbent Board has expected shareholders to cover the cost of the Company's missteps.”
He said that despite the current board’s opposition to the nominations, he had been “heartened by the strong support that [SpringOwl had] received in the course of [its] engagement with fellow BPTY shareholders.”
“It is clear to us that BPTY shareholders want change and will no longer tolerate the insular stance taken by the incumbent Board,” Ader continued.
"We have spoken with a great number of people representing a substantial portion of BPTY's shareholder base and welcome any interested shareholders to call or email us to discuss our case for change of bwin.party’s board.”
While all four proposed nominees are independent of bwin.party, two have existing connections with Ader.
Fertik’s Reputation.com lists Ader as a founding shareholder, while Steve Rittvo’s Innovation Group has also previously worked with the analyst. However, the bwin.party board did not list this as one of its reasons for advising shareholders to reject the nominations.
Instead it cast doubt on the credibility of each nominee, noting that Ader was yet to properly outline his plans to restore the company to growth and reinvigorate its share price.
It also noted that the four nominees would increase the size of the board at a time when the company was looking to keep it at a manageable size, and highlighted the fact that the quartet were all male, while the company had committed to appointing a second woman to the board.
The operator also claims to have repeatedly urged Ader to exercise his option to nominate an individual to the board, gained under the terms of his acquisition of a 6.1 per cent stake in the company from PartyGaming founders Ruth Parasol and Russell DeLeon. He has since reduced his stake to 5.2 per cent.