The CEO of online gambling giant bwin.party, Norbert Teufelberger, has called for activist shareholder Jason Ader to exercise his right to take up a nomination on the company’s board of directors.
“We urge him to tell us who his nominee is,” said Teufelberger to the Financial Times, before adding, “I don’t get the feeling he’s [Ader] hostile or against me or my team. An activist shareholder makes us think about whether we have considered all possible avenues and we are extremely critical in assessing that.”
According to investment advice site Investopedia, an activist investor is:
An individual or group that purchases large numbers of a public company's shares and/or tries to obtain seats on the company's board with the goal of effecting a major change in the company. A company can become a target for activist investors if it is mismanaged, has excessive costs, could be run more profitably as a private company or has another problem that the activist investor believes it can fix to make the company more valuable
In March 2014, Ader’s company SpringOwl bought a 5.02% stake in bwin.party from the founders of the group’s PartyGaming arm, Ruth Parasol and Russ Deleon, for around $100 million. This large stake gives Ader the right to sit on the board of directors of bwin.party or nominate someone to sit on his behalf.
Ader invested heavily because he believes the shares are undervalued and has gone on record to say he is open to the idea of buying more stock in future. Ader said the Bwin brand is “remarkable” and praised it for being in good financial shape despite some “very significant challenges in Germany.”
Speaking of the delay in making SpringOwl’s nominee public knowledge, Ader said: “We need to spend more time with the company and understand each board member’s skill sets so that we can complement them with a new director.”
Shares in bwin.party have fluctuated wildly over the past year, trading at a high of 148.50 per share on May 17, 2013 and as low as 103.70 on August 30, 2013. When bwin.party was formed, it has a Market Capitalisation of £1.6 billion, but that value has tumbled to a still-massive £1.065 billion. Bwin.party shares (ticket BPTY) are currently trading at 130.80, up almost 3% from the close of play on April 1.