The board of directors at Evolution has urged its shareholders to reject the recent takeover offer from Candle Lake Limited, aiming to privatize the gaming supplier. This recommendation, made public on Monday, comes after Candle Lake, an investment vehicle led by Kenneth Dart, announced a mandatory cash offer on August 13 to acquire all outstanding shares of Evolution.
The proposed acquisition values Evolution at approximately SEK131.7 billion. Candle Lake had previously boosted its stake in Evolution to over 30% in July by purchasing an additional 2,050,000 shares. According to Swedish law, any individual shareholder holding at least 30% of a company must extend an offer for the remaining shares.
However, Evolution's board expressed concerns regarding the offer, stating it “does not reflect the fair market value of Evolution.” The company also noted that Candle Lake appeared to be fulfilling a legal requirement rather than expressing genuine intention to acquire the entire company or implement significant changes to its operations. In a statement, Evolution pointed out that Candle Lake had indicated its future plans for Evolution did not include any substantial changes to the company's operations.
Candle Lake had previously mentioned that if it acquired more than 90% ownership of Evolution, it would seek to take the company private, which would entail delisting it from Nasdaq Stockholm. Nonetheless, this plan appears to be facing challenges.
Evolution has also faced its own set of difficulties recently. The UK Gambling Commission was on the verge of suspending its license due to its games being offered on unlicensed platforms within the UK. Instead of a suspension, Evolution settled for £4.75 million after failing to enforce adequate anti-money laundering and customer due diligence controls.
Additionally, Evolution's attempted acquisition of Galaxy Gaming for $85 million fell through when the termination date for the merger agreement passed in July without completion. As of today, Evolution's shares have seen a slight increase of 0.51%, reaching SEK824.20 on the Stockholm Stock Exchange.
