London - Bwin.Party said it plans to hire three new directors to reshape its board after an American activist investor demanded changes in how the online gambling company is run.
The investor, Jason Ader, says Bwin.Party has been badly managed since it was formed by a merger in 2010.
His SpringOwl vehicle has put forward four board nominees at the company's annual shareholder meeting next Thursday.
Bwin.Party responded by announcing the replacement of a third of the board.
The new line-up contains none of Ader's nominees, but deputy chairman Rod Perry and fellow directors Manfred Bodner and Helmut Kern would step down.
Philip Yea, who takes over as chairman at the annual meeting, said the changes would “allow the board to anticipate and address the complexities of technological change, the inevitable transition to regulated and taxed markets and also to maximise the long-term value of the business.”
Representatives for Ader could not immediately be reached for comment.
The company is the product of a 2010 merger between sports betting group Bwin and online poker group PartyGaming.
In March, it posted a 35 percent drop in full-year earnings to 108 million euros ($149.75 million) because of falling revenue, increased gaming taxes in Germany and start-up costs in New Jersey.
In common with rivals, it is pursuing a strategy of focusing on fewer markets where regulations on gambling are more clear cut.
Ader bought a stake of more than 5 percent through SpringOwl earlier this year and has mounted a public campaign for change at Bwin, accusing its managers of destroying shareholder value and allowing costs to spiral.
“Jason's got a right to put a director on the board and he should, but four people for 5 percent is not on,” said a top-40 shareholder in the company.
“But he has made a lot of money in the US so he should be listened to.”
The shareholder added: “Most of the travails of Bwin come not just from the merger but also regulatory issues. So it's a victim of what's happening to the industry rather than total ineptitude. But Mr Ader has a point.” - Reuters