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Activist investor Jason Ader of SpringOwl on Monday made available its initial presentation highlighting the need for change at Bwin.Party, one of the largest online gambling firms in the world.
The presentation provides BPTY shareholders with a detailed overview of ways in which SpringOwl believes that the company’s incumbent Board has overseen significant shareholder value destruction (approximately 60% decline in share price since the 2010 announcement of a merger of Bwin Interactive Entertainment AG and PartyGaming plc) due to what it describes as a “failed execution, failed merger and failed oversight”.
Ader, a New York based hedge-fund investor well-known to Gambling911 readers from his earlier victory over IGT announced in March that he intends to propose for election four new independent Directors to the Board of BPTY at the forthcoming Annual General Meeting of BPTY.
Ader’s company, SpringOwl acquired a 5.25 percent stake in Bwin.Party in February from the founders of PartyGaming, Ruth Parasol and Russ DeLeon, who sold their 14.3 percent stake as part of a divorce settlement.
The SpringOwl’s presentation contains information on a plan to reverse what it deems as the current “destructive” trend as well as the biographies of four new Highly-Qualified Independent Director candidates and how they can help the Board to maximize value to all BPTY shareholders through their collective expertise and backgrounds in Technology, Online and Land-based Gaming, Brand Marketing and Bank Regulation.
Summary highlights of the presentation include:
- Decline of Shareholder Value: Summaries of reduction in shareholder value suffered by BPTY shareholders as the incumbent Board rewarded Management with stock grants and removed ties to shareholder returns from its incentive plans;
- Underperformance to Peers: Details of BPTY's substantial underperformance relative to both its peers and relevant stock market indices as well as valuation metrics which SpringOwl believes are indicative of the Company's missteps;
- Deteriorating Performance: Overview of the deterioration in financial metrics and key performance indicators under the watch of the incumbent Board;
- Flawed Merger Strategy and Integration: Description of the failure to achieve the key objectives of the merger;
- Flawed Operating Strategy: Results of the Company's flawed "Volume to Value" strategy which SpringOwl believes has resulted in a negative feedback circle of lower marketing spend and reductions in revenue / high value customers;
- Decline of Poker Party: Evidence of the decline of BPTY's Party Poker brand under the watch of the incumbent Board; and
- Cost Structure: Outline of the Company's runaway cost structure and its consequential impact on margins.
Ader commented, "We have received incredible support from the BPTY shareholders we have already spoken with and look forward to more conversations as shareholders have the opportunity to add sorely needed skills to the Board of our company. We are confident that each of the Highly-Qualified, Independent Director candidates will play a major part in creating value for all BPTY shareholders."
Mr. Ader continued, "While our efforts to work with the incumbent Board towards a constructive solution continue, their lack of action in the face of substantial shareholder losses is frustrating. We believe that the contents of this presentation clearly outline the case for change at BPTY and call on the Board to immediately institute this needed change by seating the four Highly-Qualified Independent Director candidates."
BPTY's upcoming Annual General Meeting is scheduled for May 22, 2014.
The presentation is available at http://savebwinparty.com/presentations
- Aaron Goldstein, Gambling911.com
