The board of Evolution has advised shareholders to reject Candle Lake Limited's mandatory takeover proposal, aimed at privatizing the gaming supplier. This recommendation was made public on Monday, following Candle Lake's cash offer for all of Evolution's outstanding shares, which was submitted on August 13 by Kenneth Dart's investment vehicle.
The potential deal could value Evolution at approximately SEK131.7 billion. Candle Lake had increased its stake in the company to over 30% in July by purchasing an additional 2,050,000 shares.
Per Swedish regulations, any investor holding at least 30% of a company's shares is required to make an acquisition offer for the remaining shares. However, Evolution’s board indicated in a statement that the offer “does not reflect the fair market value of Evolution.”
The board also expressed concerns that Candle Lake's intent might only be to fulfill its obligation without a genuine interest in taking the company private or implementing significant changes. “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 statement added.
Candle Lake has previously indicated plans to take Evolution private should it gain over 90% ownership, which would lead to a delisting from Nasdaq Stockholm.
Despite these developments, Evolution has been facing challenges. The UK Gambling Commission nearly suspended its license after the company’s games were found on unlicensed websites. The firm opted for a £4.75 million settlement due to lapses in anti-money laundering and customer due diligence controls.
Additionally, a planned acquisition of Galaxy Gaming fell through as the deadline for closing the $85 million deal expired in July, prompting Evolution to cancel the merger agreement.
On the Stockholm Stock Exchange, Evolution’s stock rose by 0.51% today, reaching SEK824.20.
