Ader Investment Management, the group that wants to elect three independent nominees to the IGT Board of Directors, claims that a ‘lack of focus,’ a lack of ‘casino experience,’ at the top level and ‘poor capital allocation’ has left IGT ‘undervalued.’
Jason Ader of Ader Investment Management publicly announced that AIM has filed with the US Securities and Exchange Commission a preliminary proxy statement.
The former Wall Street analyst, who has sat on the board of Las Vegas Sands since 2009, wants IGT to refocus on its core business of slot machine manufacturing.
IGT spent $500m to buy social gaming company DoubleDown Casino in 2012 and a year earlier invested $115m to buy Swedish online gaming operator Entraction, only to shut it down.
The Ader Group intends to nominate a “short slate” of three directors with relevant experience, including significant casino gaming industry experience and knowledge of financial markets. The slate will include IGT’s former Chairman and CEO Charles Mathewson, AIM’s Daniel Silvers and Raymond Brooks, principal of R.J. Brooks and former CEO of ACA Financial Guaranty Corp.
By obtaining a significant minority of IGT’s board, the Ader Group wants to refocus IGT on a business model which it believes led to IGT’s historic success. The Ader Group seeks to restore shareholder value by re-focusing IGT on its core slot machine and systems business.
Mr. Ader said: “We believe IGT is deeply undervalued as a result of a lack of focus on the core slot machine and systems business that we believe generated IGT’s historic success, a lack of casino gaming industry experience in management ranks, and the results of poor capital allocation decisions highlighted by a series of costly non-strategic acquisitions. We are convinced our slate will make a major improvement in this company.”
Ader further noted that the company’s stock price, which declined by 16.2 per cent in 2012, ‘speaks for itself.’
“We believe investors are confounded by IGT’s strategic direction and that IGT’s valuation has suffered as a result,” Mr. Ader added: “We are further convinced that IGT has abdicated its competitive advantage in its core business through its recent strategy. We expect that this new slate will add experience and depth,” said Ader.
Ader’s selection of nominees, which do not include Ader himself, make clear that this proxy contest is solely about improving shareholder value. This shareholder election is not about any agenda other than refocusing IGT on its historically successful core business to improve shareholder value. While IGT may choose to try and distract shareholders from the key issues, our goal is solely to maximize value to IGT’s shareholders.”
He also moved to refute an IGT press notice stating that he had ‘withdrawn his intent to nominate himself as a director candidate at IGT’s upcoming 2013 Annual Meeting of Shareholders’ claiming it was ‘inaccurate.’