The board of Evolution has advised its shareholders to reject Candle Lake Limited's recent mandatory takeover proposal, which aims to facilitate the privatization of the gaming supplier. This recommendation, disclosed on Monday, follows a public cash offer from Candle Lake, an investment vehicle controlled by Kenneth Dart, made on August 13 to acquire all outstanding shares of Evolution.
The takeover could potentially value Evolution at approximately SEK131.7 billion. In July, Candle Lake had already raised its stake in Evolution to over 30% by purchasing an additional 2,050,000 shares, triggering a requirement under Swedish law that mandates any investor with this percentage of holdings to propose an offer for the remaining shares.
Despite the bid, Evolution's board issued a statement asserting that the offer “does not reflect the fair market value of Evolution.” The company further contended that Candle Lake's intention appears to be solely to fulfill its legal obligation, lacking genuine interest in acquiring the entire business or implementing substantial changes.
The board remarked, “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.” This assertion, according to the board, is accepted as accurate without reason for further dispute.
Candle Lake had indicated that should it secure more than 90% ownership of Evolution, the intent would be to take the company private, leading to its delisting from Nasdaq Stockholm. However, that endeavor faces challenges amid a tumultuous period for Evolution.
Recently, the UK Gambling Commission almost suspended Evolution's license due to investigations that revealed its games were accessible on unlicensed websites. To resolve this, the company agreed to a £4.75 million settlement for failing to uphold adequate anti-money laundering measures and customer due diligence required by regulations.
Additionally, Evolution’s planned acquisition of Galaxy Gaming for $85 million fell through when the closing period ended in July without completion, prompting the termination of the merger agreement.
Despite these hurdles, Evolution's stock price showed a slight increase of 0.51%, rising to SEK824.20 as trading began on the Stockholm Stock Exchange today.
