Evolution's board has advised its shareholders to reject the takeover bid from Candle Lake Limited, a move that could potentially lead to Evolution going private. This recommendation, announced on Monday, follows a public cash offer made by Kenneth Dart's investment firm on August 13 to buy all outstanding shares of Evolution.
The proposed acquisition could value Evolution at approximately SEK131.7 billion. In July, Candle Lake increased its stake in Evolution to over 30% by purchasing an additional 2,050,000 shares. According to Swedish law, any investor with at least 30% ownership must make an offer for the remaining shares of the company.
However, Evolution's board pointed out that Candle Lake's offer “does not reflect the fair market value of Evolution.” The company also suggested that the offer was merely a compliance measure rather than a genuine intent to acquire the entire business or implement significant changes.
Evolution's statement emphasized that Candle Lake had indicated its plans for Evolution following the offer do not involve any material changes regarding its future operations. The board accepted this assertion and saw no reason to dispute it.
Despite Candle Lake's interest, the plan to take Evolution private appeared to have encountered obstacles. If Candle Lake were to gain more than 90% ownership, it aimed to delist Evolution from Nasdaq Stockholm.
Recently, Evolution has faced challenges, including a near suspension of its license by the UK Gambling Commission due to its games being available on unlicensed websites. This resulted in a £4.75 million settlement for the company's failure to uphold sufficient anti-money laundering and customer due diligence protocols.
Additionally, a merger with Galaxy Gaming valued at $85 million fell through, as the closing period expired in July and Evolution terminated the agreement. As the Stockholm Stock Exchange opened, Evolution's shares saw a slight rise, increasing by 0.51% to SEK824.20.
