The board of Evolution has advised its shareholders to turn down Candle Lake Limited's proposed takeover offer, which aims to privatize the gaming supplier. This recommendation was made public on Monday following Candle Lake's mandatory cash bid, launched by Kenneth Dart's investment entity on August 13, to acquire all outstanding shares of Evolution.
Candle Lake's offer, which could value Evolution at approximately SEK131.7 billion, comes after it raised its stake in the company to over 30% last July through the purchase of an additional 2,050,000 shares. According to Swedish laws, any investor attaining a minimum of 30% ownership in a company is required to extend an offer for the remaining shares.
Evolution's board expressed concerns regarding the offer, declaring it “does not reflect the fair market value of Evolution.” The company also suggested that Candle Lake's intentions may stem solely from meeting its legal obligations rather than a genuine desire to acquire the entire business or implement significant changes.
In a statement, Evolution remarked, “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 affirmed that it views this declaration as accurate and has no reason to contest it.
Candle Lake had indicated previously that if it managed to secure more than 90% ownership of Evolution, it would pursue plans to privatize the company and seek its delisting from Nasdaq Stockholm. However, this initiative seems to be facing obstacles.
The situation for Evolution has been tumultuous, with its license nearly suspended by the UK Gambling Commission after investigations revealed its games were being offered on unauthorized websites. Ultimately, Evolution settled for £4.75 million due to shortcomings in its anti-money laundering and customer due diligence protocols.
Additionally, a planned acquisition of Galaxy Gaming, valued at $85 million, fell through as the deadline for concluding the deal expired in July, prompting Evolution to terminate the merger agreement.
As of the opening of the Stockholm Stock Exchange today, Evolution's stock slightly rose by 0.51%, reaching SEK824.20.
