The board of Evolution has advised its shareholders to reject the recent mandatory takeover proposal from Candle Lake Limited, which aims to privatize the gaming supplier. This recommendation was made public on Monday, following Candle Lake's cash offer presented on August 13, seeking to acquire all outstanding shares of Evolution.
The valuation of this deal is estimated at approximately SEK131.7 billion. Candle Lake had increased its ownership of Evolution to over 30% in July through the acquisition of 2,050,000 shares. Under Swedish regulations, any shareholder who holds a minimum of 30% must propose to buy out the remaining shares.
However, Evolution's board has publicly stated that the offer fails to reflect the fair market value of the company. They accused Candle Lake of making this proposal merely to fulfill a legal obligation, indicating a lack of genuine interest in acquiring the entire firm or implementing significant changes to its operations.
In a formal statement, Evolution noted, "The board of directors further notes that Candle Lake has stated that its plans for the future business and general strategy of Evolution, following the offer, do not currently include any material changes with regard to Evolution's future operations." The board confirmed that it takes these assertions at face value, without dissent.
Candle Lake had previously expressed intentions to take Evolution private should it secure over 90% ownership, aiming to delist from Nasdaq Stockholm. However, anticipated plans seem to have encountered challenges.
Evolution has had a tumultuous period lately; a potential suspension of its license by the UK Gambling Commission loomed due to its games being listed on unlicensed sites. The company eventually reached a settlement of £4.75 million for failing to uphold adequate anti-money laundering and customer due diligence controls.
Additionally, its planned acquisition of Galaxy Gaming fell through after the deadline for the $85 million deal ended in July, leading to the termination of the merger agreement. As of today, Evolution's stock has seen a slight increase of 0.51%, trading at SEK824.20.
