Evolution Gaming's board has advised its shareholders to reject the takeover offer from Candle Lake Limited. This recommendation came to light on Monday, following a mandatory public cash offer issued by Kenneth Dart's investment firm on August 13 to purchase all outstanding shares of Evolution.
The potential deal is estimated to value Evolution at approximately SEK131.7 billion. In July, Candle Lake had already increased its stake in Evolution to over 30% by acquiring an additional 2,050,000 shares. According to Swedish law, any single entity holding at least 30% of a company is required to extend an offer for the remaining shares.
In a statement, Evolution's board expressed concerns that the bid does not accurately represent the company's fair market value. They suggested that Candle Lake's offer seems more a matter of compliance than a genuine intent to acquire Evolution or to implement significant alterations to the company's operations.
The board noted, "Candle Lake has indicated 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 assumes that this is correct and has no reason to take a different view on any relevant aspect."
Candle Lake had previously announced its intention to take Evolution private should it gain ownership exceeding 90%, leading to the company's delisting from Nasdaq Stockholm. However, these plans appear to be facing challenges.
In recent weeks, Evolution has been through a tumultuous phase; the UK Gambling Commission nearly suspended its license after the company's games were found on unauthorized websites. Evolution opted for a settlement, paying £4.75 million due to shortcomings in anti-money laundering and customer due diligence practices.
Additionally, a planned acquisition of Galaxy Gaming, valued at $85 million, fell apart as the closing period expired in July, prompting Evolution to terminate that merger agreement.
As of the latest trading session on the Stockholm Stock Exchange, Evolution's shares have experienced a slight increase of 0.51%, reaching SEK824.20.
