In the matter of Ainsworth Game Technology Ltd

[2025] NSWSC 832

Supreme Court

New South Wales

Medium Neutral Citation:

In the matter of Ainsworth Game Technology Ltd [2025] NSWSC 832

Hearing dates:

25 July 2025

Date of orders:

25 July 2025

Decision date:

28 July 2025

Jurisdiction:

Equity - Corporations List

Before:

Nixon J

Decision:

Order convening scheme meeting and associated orders made

Catchwords:

CORPORATIONS – Arrangements and Reconstructions – Schemes of Arrangement or Compromise – Application under s 411 of the Corporations Act 2001 (Cth) for orders convening meeting of members to consider and, if thought fit, to agree to proposed scheme of arrangement – whether requirements to order scheme meeting are satisfied – whether scheme booklet should be amended prior to despatch to shareholders

Legislation Cited:

Corporations Act 2001 (Cth) ss 260A, 411, 1319

Supreme Court (Corporations) Rules 1999 (NSW) r 3.4

Corporations Regulation 2001 (Cth) Sch 8, Pt 3, [8301(a)(iii)]

Cases Cited:

In the matter of Healthscope Ltd [2019] FCA 759

In the matter of Huon Aquaculture Group Ltd [2021] FCA 1170

In the matter of Mason StevensGroup Limited [2025] NSWSC 84

In the matter of Mayne Pharma Group Ltd [2025] NSWSC 513

In the matter of Nitro Software Ltd [2023] NSWSC 13

In the matter of Virtus Health Ltd [2022] NSWSC 597 MYOB Group Limited, in the matter of MYOB Group Limited [2019] FCA 484

One Funds Management Limited, in the matter of One Funds Management Limited [2025] FCA 475

Re Absolute Equity Performance Fund Ltd [2022] FCA 933

Re Australand Holdings Ltd [2005] NSWSC 835

Re Azure Minerals Ltd [2024] WASC 58

Re Coca-Cola Amatil Ltd [2021] NSWSC 270

Re CSR Limited (2010) 183 FCR 358; [2010] FCAFC 34

Re ELMO Software Pty Ltd [2023] NSWSC 12

Re HIH Casualty and General Insurance Ltd [2006] NSWSC 485

Re Integra Group Limited [2021] NSWSC 143

Category:

Principal judgment

Parties:

Ainsworth Game Technology Limited (Plaintiff)

Representation:

Counsel:
M Izzo SC / T O'Brien (Plaintiff)
D Thomas SC (Bidder)
J Potts SC / T Goldberg (Mr Kjerulf Ainsworth)

Solicitors:
Clayton Utz (Plaintiff)
King and Wood Mallesons (Bidder)
HWL Ebsworth (Mr Kjerulf Ainsworth)

File Number(s):

2025/255936

Publication restriction:

Nil

JUDGMENT

1. By Originating Process filed on 4 July 2025, the Plaintiff, Ainsworth Game Technology Ltd (AGT), seeks orders under ss 411 and 1319 of the Corporations Act 2001 (Cth) (the Act) for the convening and holding of a scheme meeting to consider a proposed scheme of arrangement (Scheme).

2. AGT is a public company limited by shares which is listed on the Australian Securities Exchange (ASX). It specialises in the development and manufacture of electronic gaming machines and content, and other related equipment for the gaming and casino industries.

3. On 28 April 2025, AGT announced to the ASX that it had entered into a Scheme Implementation Deed with Novomatic AG (SID). Novomatic is a multinational gaming technology company with headquarters in Austria. It became the majority shareholder of AGT in 2018 and currently holds a relevant interest in 52.9% of the issued share capital in AGT.

4. The Scheme provides for Novomatic to acquire all of the issued shares in AGT which it does not already own, being approximately 47.1% of AGT’s 336.8 million ordinary shares, for “Total Cash Value” of $1.00 per share. The Total Cash Value is comprised of the scheme consideration and any “Permitted Dividend”. The Independent Board Committee of AGT (IBC) currently intends, having regard to the franking credits available to AGT, to pay a fully franked Permitted Dividend of $0.19 cash per AGT share, prior to the implementation of the Scheme.

5. If this Permitted Dividend is paid, the Total Cash Value of $1.00 per share will consist of:

1. the Scheme Consideration of $0.81 per share; and

2. the Permitted Dividend of $0.19 per share.

6. If this Permitted Dividend is not paid, the Scheme Consideration will be $1.00 per share.

7. Implementation of the Scheme is subject to Conditions Precedent, which need to be satisfied or (if permitted) waived in accordance with the terms of the SID.

8. At the first Court hearing, AGT sought orders under s 411 of the Act for the convening and holding of a meeting of the shareholders in AGT for the purposes of considering and, if thought fit, agreeing to (with or without modification) the Scheme (Scheme Meeting).

9. In respect of this application, I granted leave to be heard to:

1. Novomatic, for whom Mr Thomas SC appeared; and

2. Mr Kjerulf Ainsworth, for whom Mr Potts SC and Mr Goldberg appeared. Mr Ainsworth holds around 4.99% of the total issued shares in AGT.

10. Mr Ainsworth had, prior to the hearing, indicated his intention to seek an adjournment of the first Court hearing. However, no such application was made. Instead, Mr Ainsworth raised three specific concerns regarding the adequacy of the disclosure in the Scheme Booklet and submitted that, unless these matters were addressed, the Court should decline to convene the Scheme Meeting and to order the despatch of the Scheme materials.

11. At the hearing, AGT agreed to make a minor amendment to the Scheme Booklet which addressed one of these three matters. AGT submitted that it should not be required to make any further amendments to address the two other matters raised by Mr Ainsworth, and that those matters did not provide a basis for the Court to decline to grant the relief sought by AGT.

12. At the conclusion of the hearing, I made the orders sought by AGT for the convening of the Scheme Meeting and for the despatch of the Scheme materials. These are my reasons for making those orders. In preparing these reasons, I have drawn on the helpful submissions of Mr Izzo SC and Mr O’Brien, who appeared for AGT.

Evidence on the application

13. AGT read three affidavits in support of its application.

14. The first was the affidavit of Mr Alistair Snow, a solicitor employed at Clayton Utz, the solicitors for AGT. His affidavit exhibited a company search of AGT, establishing that it is a Part 5.1 body, and the announcement made to the ASX in connection with the Scheme on 28 April 2025.

15. The second was an affidavit of Mr Mark Ludski, who is the Company Secretary of AGT. Mr Ludski gave evidence in relation to the following matters:

1. the nature of AGT’s business;

2. the terms of the SID and the Scheme;

3. the lodgement of the Scheme Booklet and other documents with the Australian Securities and Investments Commission (ASIC), the giving of notice to ASIC in respect of the first Court hearing, and the making of amendments to the Scheme materials to address comments made by ASIC;

4. the verification process undertaken by AGT in respect of the information in the Scheme Booklet;

5. the arrangements for the holding of the Scheme Meeting, and the consent of the proposed Chairperson and Alternative Chairperson to act in such capacity;

6. the proposed treatment under the Scheme of various performance rights issued by AGT;

7. the interests of the directors in AGT shares and performance rights;

8. the proposal to retain a third party to answer calls from shareholders to an information line in respect of the Scheme and to conduct an outbound call campaign; and

9. the intentions of the IBC regarding the declaration of a Permitted Dividend.

16. The third was an affidavit of Mr Paul Schroder, who is a partner of King & Wood Mallesons, the solicitors for Novomatic. He provided evidence of the verification process adopted in relation to the Bidder Information in the proposed Scheme Booklet, which was in customary form.

17. Mr Schroder also deposed to the execution of a Deed Poll on 22 July 2025 by which Novomatic has undertaken in favour of each Scheme Shareholder to pay the Scheme Consideration in cleared funds to which each such shareholder is entitled, and to perform its obligations under the Scheme, subject to the Scheme becoming effective.

18. Finally, Mr Schroder gave evidence of the arrangements which have been put in place by Novomatic in order to fund the Scheme. The maximum amount of consideration payable in respect of the Scheme is estimated to be $158,643,112.00 based on the number of AGT shares on issue as at the date of the draft Scheme Booklet. Mr Schroder deposed that:

1. on 24 October 2024, Novomatic executed a revolving loan facility with Commerzbank AG, London Branch, Erste Group Bank AG, Landesbank Baden-Wurttemberg, Unicredit Bank Austria AG and Raiffeisen Bank International AG (Facility);

2. under the Facility, drawdowns by Novomatic are permitted subject to the satisfaction of certain conditions on the date of the utilisation request, including that no actual or potential event of default would result from the proposed drawdown; and

3. Novomatic intends to fund the Scheme Consideration (inclusive of the Permitted Dividend) through funds available under the Facility and available cash reserves.

19. In addition, AGT tendered a letter from ASIC, in the usual form, dated 24 July 2025, confirming that ASIC does not currently propose to appear to make submissions or to intervene to oppose the Scheme at the first Court hearing.

20. In response to AGT’s application, Mr Ainsworth read limited parts of an affidavit which he affirmed on 24 July 2025. This material concerned an investigation by an Austrian regulatory body known as “WKStA” in relation to Novomatic and Mr Harald Neumann, who is the Chief Executive Officer (CEO) of AGT. Mr Ainsworth exhibited to his affidavit two articles which had been published in the Australian media on 12 June 2025 in relation to those matters, and an announcement issued to the ASX by AGT on 16 June 2025 in relation to these media articles. This announcement stated as follows:

“Acknowledgement of Media Reports

Ainsworth Game Technology Limited (Ainsworth or the Company) notes recent media articles published on 12 and 13 June 2025, which refer to investigations commenced in 2019 by the Austrian Economic and Corruption Prosecutor’s Office (WKStA) into more than 100 people and their suspected associates (which also included Ainsworth’s current Chief Executive Officer (CEO) Mr Harald Neumann and the Company’s controlling shareholder Novomatic AG).

Ainsworth became aware of the WKStA investigations in August 2019 at the time of the publication of Austrian media articles and communicated with all gaming regulators to ensure that they were aware of the investigations. Mr Neumann was a non-executive director of Ainsworth at the time. Periodic updates on the status of the investigations have been provided to regulators in applicable jurisdictions in accordance with the Company’s licensing and compliance procedures.

Whilst is not the Company’s policy to comment on market speculation or media reports, the Ainsworth Board advises that it considered the matter and the Company’s continuous disclosure obligations at that time, and after obtaining legal advice, determined that no ASX announcement was required including because the investigations were insufficiently definite and preliminary in nature with no factual evidence that would justify the allegations. As part of its ordinary course of business in complying with its regulatory obligations and to determine whether any change in circumstances might require disclosure to the market, the Ainsworth Board regularly monitors the matter through its Regulatory Compliance Committee (RCC). The RCC also receives regular updates from legal representatives acting for both Novomatic AG and Mr Neumann.

These investigations are a matter of public record and commenced prior to Mr Neumann’s appointment as CEO of the Company in October 2021. Following a probity investigation conducted by the Compliance Division, the RCC recommended that Mr Neumann was suitable from a regulatory standpoint, to be considered for the CEO position. Mr Neumann is licensed and has been found suitable in over 100 jurisdictions where licensure is required, with full knowledge of the investigations.

Based on information from WKStA, we are advised that all (except for one) of the investigations involving Mr Neumann and/or Novomatic AG have been discontinued with the necessary approvals being received from the relevant Austrian regulatory authorities with no findings of wrongdoing. Current information available on the one remaining investigation indicates that WKStA will finalise its examination on the established facts prior to submitting its proposal to the necessary Austrian regulatory authorities for approval to have this last investigation discontinued.

This announcement was authorised for lodgement by the Board of Directors.”

Relevant Principles

21. The Court's role at the first Court hearing in respect of a scheme is to determine, in the exercise of its discretion, whether to approve the convening of a scheme meeting and the explanatory statement if it is satisfied of several matters, namely that:

1. the plaintiff is a Part 5.1 body;

2. the proposed scheme is an "arrangement" within the meaning of s 411 of the Act;

3. the scheme is bona fide and properly proposed;

4. ASIC has had a reasonable opportunity to examine the proposed scheme and explanatory statement, to make submissions and has had 14 days' notice of the proposed hearing date of the first Court hearing;

5. the procedural requirements under the Supreme Court (Corporations) Rules 1999 (NSW) (Rules) have been met; and

6. there is no apparent reason why the scheme should not, in due course, receive the Court's approval if the necessary majority of votes is achieved.

(See In the matter of Mason Stevens Group Limited [2025] NSWSC 84 at [9]-[11] and the authorities there cited)

22. If the preconditions to the exercise of power under s 411(1) of the Act are satisfied, it is necessary for the Court to determine whether it should, in its discretion, exercise that power. The Court will consider whether the proposed scheme is fit for consideration at the proposed scheme meeting, in the sense that it is of such a nature and cast in such terms that, if it achieves the statutory majority at the meeting, the Court would be likely to approve it on the hearing of a petition which is unopposed; and that members are to be properly informed as to the nature of the scheme before the scheme meeting: Mason Stevens Groupat [10] and the authorities there cited.

Determination

Formal requirements met

23. I am satisfied that each of the preconditions to the exercise of the power in s 411(1) of the Act has been met.

24. As a company registered under the Act, AGT is a Part 5.1 body, and the proposed change of control transaction under the Scheme is an “arrangement” within the meaning of s 411.

25. By the SID, AGT has committed itself to propounding the Scheme, which provides prima facie evidence that the Scheme is bona fide and has been properly proposed: Re ELMO Software Pty Ltd [2023] NSWSC 12 at [18]. The directors of AGT who comprise the IBC have unanimously recommended that shareholders vote in favour of the Scheme, in the absence of a superior proposal, and subject to the independent expert continuing to conclude that the Scheme is in the best interests of shareholders.

26. The independent expert has expressed the opinion that the scheme is fair and reasonable and in the best interests of AGT’s shareholders in the absence of a superior proposal. The independent expert has assessed the market value of AGT shares as between $0.93 and $1.07, with the total consideration of $1.00 being the midpoint of this range. The reasons for this conclusion are disclosed in the independent expert’s report.

27. ASIC has had 14 days' notice of the hearing date of the first Court hearing. On 4 July 2025, a draft Scheme Booklet was lodged with ASIC and, on 10 July 2025, a copy of the Originating Process and the supporting affidavit of Mr Snow was lodged with ASIC.

28. ASIC has had a reasonable opportunity to examine the proposed Scheme and Scheme Booklet and to make submissions. As noted at paragraph [19] above, ASIC has indicated that it does not currently propose to appear to make submissions or intervene to oppose the Scheme at this hearing.

29. The relevant procedural requirements under the Rules have generally been met, and I will relieve AGT from compliance with Rule 3.4 of the Rules on the basis that AGT will make an announcement to the ASX in respect of the second Court hearing.

Other matters addressed by AGT

30. Mr Izzo drew the Court’s attention to a number of matters.

31. First, the IBC comprises all of the directors of AGT other than Dr Haig Asenbauer, who is Novomatic’s nominee director on the board of AGT. The Scheme Booklet discloses that Dr Asenbauer has accordingly determined not to make any recommendation concerning the Scheme. This is permitted by the regulations and is appropriate in such circumstances: Corporations Regulation 2001 (Cth), Schedule 8, Part 3, paragraph 8301(a)(iii).

32. Secondly, the Scheme Booklet discloses the material interests of the directors who comprise the IBC, including their shares and performance rights. In circumstances where such disclosure is made, those interests do not prevent the directors who comprise the IBC from making a voting recommendation to AGT shareholders, and AGT shareholders may take those interests into account in determining the weight to give to this recommendation: Re Integra Group Limited [2021] NSWSC 1434 at [22] (Black J).

33. Thirdly, the Scheme Booklet addresses the proposed treatment of some 7,050,000 Performance Rights and some 4,200,000 Cash Settled Performance Rights. In particular, the Scheme Booklet discloses that:

1. all of the Performance Rights on issue as at the date of the SID lapsed on 30 June 2025, due to the relevant performance hurdles not being met; and

2. the implementation of the Scheme will constitute a “Change Event” for the purposes of the rules governing the Cash Settled Performance Rights and, accordingly, the relevant proportion of those rights which are subject to EPS (earnings per share) and time-based vesting conditions will vest if the Scheme is implemented. On the basis of the indicative timetable for implementation of the Scheme, this will result in a total cash payment of $486,000 being made to the holders of those rights, including approximately $116,000 to the CEO, Mr Neumann.

34. The fact that holders of performance rights may receive benefits as a result of the Scheme, by reason of early or accelerated vesting of those rights, does not place them in a different class to other shareholders: ELMO at [25].

35. Fourthly, clause 2.3 of the SID permits Novomatic to make an off-market takeover bid for all of the shares in AGT on terms and conditions no less favourable to AGT shareholders than those of the Scheme (Alternative Takeover Bid). However, pursuant to clause 2.3(c), any such Alternative Takeover Bid will include conditions (waivable by Novomatic) that Novomatic has received, prior to the proposed Scheme being approved at the Scheme Meeting, acceptances under the Alternative Takeover Bid which result in Novomatic having a relevant interest in at least 75% of AGT shares on a fully diluted basis. As Mr Izzo submitted, it has been accepted in a number of previous cases that such a transaction is permissible: In the matter of Healthscope Ltd [2019] FCA 759 (Beach J); In the matter of Huon Aquaculture Group Ltd [2021] FCA 1170 (O’Callaghan J); In the matter of Virtus Health Ltd [2022] NSWSC 597 at [25] (Black J); In the matter of Nitro Software Ltd [2023] NSWSC 13 at [31]-[32] (Black J); Re Azure Minerals Ltd [2024] WASC 58 at [50-[53] (Lundberg J); In the matter of Genex Power Ltd [2024] NSWSC 752 at [14] (Black J).

36. Fifthly, as noted above, the IBC currently intends to declare a fully franked Permitted Dividend of $0.19 cash per AGT share prior to implementation of the Scheme. AGT intends to fund the Permitted Dividend by relying, to the maximum extent possible, on existing cash reserves. In circumstances where (as is the case here):

1. the decision to declare such a dividend remains in the discretion of the directors of the scheme company; and

1. the dividend reduces the cash consideration payable by the bidder in a manner commensurate with the reduction in the target’s net assets (reflecting the cash outflow from the payment of the dividend);

2. the payment of such a dividend generally does not constitute financial assistance for the purposes of s 260A of the Act, and does not give rise to a reason not to convene the Scheme Meeting: Mason Stevens Group at [29] (Black J).

37. Sixthly, the Scheme Booklet discloses that Novomatic intends to fund the aggregate Scheme Consideration (which will have a maximum amount of around $158.643m) through a combination of available cash reserves and funds available under the Facility, in respect of which the available undrawn amount is in excess of $429m. Pursuant to the terms of the Scheme, no Scheme shares will be transferred to Novomatic unless and until the Scheme Consideration has been paid into a trust account for the benefit of the shareholders. As a further layer of protection, Novomatic has entered into the Deed Poll, as required by the SID. The Deed Poll is governed by the law of New South Wales and Novomatic has submitted to the non-exclusive jurisdiction of the Courts of this State. As Mr Izzo submitted, these are well-established means of managing performance risk: ELMO at [27]-[28].

38. Seventhly, Mr Izzo noted that the SID imposes a number of restrictions and obligations on AGT and its directors in relation to negotiations with third parties, including “no shop”, “no talk” and “no due diligence” restrictions. The “no talk” and “no due diligence” restrictions are subject to a fiduciary carve-out. The “Exclusivity Period” is the period from the date of the SID (namely, 28 April 2025) to the earlier of the termination of the SID in accordance with its terms or the End Date (namely, 30 November 2025), and is therefore capable of precise ascertainment. Exclusivity provisions of this kind are now commonplace in schemes of arrangement, and the length of the Exclusivity Period is comparable with the length of the exclusivity periods accepted in other schemes of a similar character: see Re Coca-Cola Amatil Ltd [2021] NSWSC 270 at [22] (Black J). In addition, the exclusivity provisions are sufficiently disclosed in the Scheme Booklet.

39. Finally, AGT has engaged Sodali & Co to respond to queries from shareholders and also to conduct an outbound call campaign for the purposes of engaging with the top 1,500 shareholders and encouraging them to vote on the Scheme. The relevant inbound and outbound call scripts were contained in the exhibit to Mr Ludski’s affidavit. In accordance with current scheme practice, AGT drew these proposed communications to the Court’s attention, but did not seek orders approving the form of them.

Disclosure Issues raised by Mr Ainsworth

40. Mr Ainsworth raised three concerns regarding the disclosure in the Scheme Booklet, one of which was addressed by an amendment proposed by AGT at the hearing. The other two concerns raised by Mr Ainsworth were as follows:

1. the Scheme Booklet does not contain any reference to the WKStA investigations which were the subject of AGT’s announcement to the ASX on 16 June 2025; and

2. in respect of one bar graph, the Scheme Booklet provides a cross-reference to certain paragraphs of the independent expert’s report, but should, in addition, provide a cross-reference to other paragraphs of the same report.

41. The second matter may be dealt with briefly. Mr Izzo identified that the relevant cross-reference is a pin-point reference to the precise part of the independent expert’s report which addresses the matters that are the subject of the particular bar graph. There is no suggestion, by the inclusion of this footnote for this purpose, that other parts of the independent expert’s report are not also relevant to the assessment of the value of the AGT shares. The Scheme Booklet contains repeated statements that the independent expert’s report should be read “carefully and in its entirety”, including a statement on the front page of the Scheme Booklet (in bold print) that the independent expert’s conclusion “should be read in conjunction with the full Independent Expert’s report”.

42. As regards the WKStA investigations, Mr Ainsworth referred to the decision of Barrett J in Re HIH Casualty and General Insurance Ltd [2006] NSWSC 485, where his Honour observed (at [81]) that:

“At the heart of the disclosure requirement is a concept of materiality. In other words, anything which, if known and appreciated, has the capacity to influence a creditor’s decision and judgment whether to vote one way rather than the other (and, indeed, whether to participate at all) must be made known as part of the explanation called for by s.412.”

43. Mr Ainsworth submitted that the existence of the WKStA investigations had the capacity to influence a creditor’s decision whether to vote one way rather than the other. In this regard, Mr Ainsworth referred to clause 1A.2 of AGT’s Constitution which provides as follows:

“1A.2   Final Determination

A person is not eligible to hold or continue to hold shares in the Company if, because of a matter the subject of a Final Determination:

(a) the Company or any subsidiary would contravene or continue to contravene Gaming Law; or

(b) a Licence would be revoked, suspended, not granted or made subject to a condition or conditions that would have a material adverse effect on the operations of the relevant Licensee.”

44. Mr Ainsworth submitted that his concern would be adequately addressed if AGT included, in the Scheme Booklet, statements in the same terms as those already made to the market in the ASX announcement of 16 June 2025.

45. On the basis of these matters, Mr Ainsworth advanced the following contention:

“We would say in all the circumstances there is materiality to the fact of this investigation, such that notwithstanding it's been announced in an ASX announcement, it should be drawn specifically to the attention of shareholders who received this scheme booklet, particularly in light of the material given, including in s[ection] 7 [of the Scheme Booklet], which purports to give a picture of who the bidder is and what they do. …

We say your Honour shouldn't approve this scheme booklet and shouldn't convene the meeting without that matter being attended to and being disclosed to shareholders as part of the scheme.”

46. I am not satisfied that the issue raised by Mr Ainsworth provides a sufficient basis for the Court to refuse to grant the relief sought by AGT on the present application.

47. It is the role of AGT, not the Court, to draft the explanatory booklet: In the matter of Mayne Pharma Group Ltd [2025] NSWSC 513 at [25] (Black J). AGT has formed the view that there is no need for any disclosure in respect of the WKStA investigations in the Scheme Booklet. In particular, it appears, by reason of AGT having adopted that position and by reason of the submissions made at the first Court hearing, that AGT is of the view that information of the type disclosed in the ASX announcement of 16 June 2025 is not material either to the price of its shares or to the decision of shareholders whether or not to approve the Scheme. In that regard, Mr Izzo submitted that any apprehension that the investigations may result in a finding which may have implications under cl 1A.2 of the Constitution regarding Novomatic’s ability to hold shares in AGT was “speculative” and, in any case, was not a matter that would be material to the decision of any shareholder whether to approve the Scheme, stating that:

“because this is a cash scheme, the shareholders don't end up holding any script.  It's actually a matter of no moment to them what the position of the ultimate shareholder under the scheme is going to be.  That's not a matter that has any capacity to affect the view that they form as to whether they should take the cash that they've been offered.”

48. Having regard to those matters, Mr Izzo submitted that, to require the full text of the ASX announcement of 16 June 2025 to be included in the Scheme Booklet, “would give to this issue a degree of emphasis without any explanation of what people are meant to do with it” and “would confuse rather than assist anyone”.

49. It is unnecessary to assess the correctness of those views for the purposes of this application.

50. The application for orders convening a meeting to consider a scheme of arrangement is in the nature of an interlocutory proceeding and is preliminary to the final determination, which is made when the matter comes back before the Court for approval after the meeting has been held: MYOB Group Limited, in the matter of MYOB Group Limited [2019] FCA 484 at [18] (Markovic J).

51. The Court will decline to convene a scheme meeting if it would be futile to set in train this process by reason that the scheme is unlikely to be finally approved (cf Re CSR Limited (2010) 183 FCR 358; [2010] FCAFC 34 at [61], [64] per Keane CJ and Jacobson J). However, Mr Ainsworth did not advance any submission that this was such a case.

52. In Re Australand Holdings Ltd [2005] NSWSC 835 at [29], Barrett J observed that:

“The court will, at the first stage, decline to permit the matter to go to members if it sees features clearly precluding a positive result if and when the matter comes back before it for approval. It should not decline to act at the first stage on the basis of matters which, while they may perhaps be arguable, do not represent clear inhibitions. The proper forum for resolution of matters of that kind is the second hearing, where they may be argued inter partes, assuming any interested person wishes to do so.”

53. On the material currently before the Court, the issue raised by Mr Ainsworth regarding the adequacy of the disclosure in the Scheme Booklet, while it may perhaps be arguable, does not provide a clear inhibition to permitting the Scheme to go to AGT shareholders, and is not a feature clearly precluding a positive result if and when the matter comes back for approval.

54. For those reasons, I was not satisfied that I should decline to make orders convening the Scheme Meeting by reason of the absence of disclosure in the Scheme Booklet in respect of the WKStA investigations. The second Court hearing is the appropriate forum for the resolution of any such issue, insofar as it is raised by any interested person on that occasion.

55. Mr Izzo acknowledged that AGT was, by proceeding to issue a Scheme Booklet in the existing form, bearing the risk that, at the second Court hearing, it may be submitted, and found, that there has not been full and fair disclosure to shareholders of all information material to the decision regarding whether to vote for or against the Scheme, such that the Scheme should not be approved (see Re CSR at [77] per Finkelstein J).

56. Given the matters set out above, these reasons for judgment should be understood as expressing no more than preliminary views as to whether there is a sufficient basis to justify convening the Scheme Meeting and approving the Scheme Booklet. I am not to be taken as having finally determined any issue regarding the adequacy of disclosure in the Scheme Booklet (see One Funds Management Limited, in the matter of One Funds Management Limited [2025] FCA 475 at [11] (Jackman J)).

Exercise of discretion

57. The independent expert has expressed the opinion that the Scheme is fair and reasonable and therefore in the best interests of the shareholders of AGT, in the absence of a superior proposal. The directors of AGT who comprise the IBC have unanimously recommended the shareholders vote in favour of the Scheme in the absence of a superior proposal and provided that the independent expert does not withdraw the conclusion that the Scheme is in the best interests of shareholders. The disclosure in the Scheme Booklet has been verified by AGT and (in the case of the Bidder Information) by Novomatic. I have addressed above the issue regarding the lack of disclosure concerning the WKStA investigations. I am satisfied that there is otherwise nothing in the terms of the Scheme or in its effect on the shareholders of AGT which would warrant the Court declining to approve the scheme at the second Court hearing, if it receives the statutory majorities required by s 411(4)(a)(ii) of the Act at the scheme meeting.

ORDERS

58. For these reasons, I made the orders sought by AGT at the conclusion of the first Court hearing.

**********

Decision last updated: 28 July 2025