Evolution's board has urged its shareholders to turn down Candle Lake Limited's recent mandatory offer to acquire the company, which aims to take it private. This recommendation, shared on Monday, follows a cash offer from Kenneth Dart's investment firm Candle Lake on August 13 to purchase all outstanding shares of Evolution.
Candle Lake's proposed acquisition values Evolution at approximately SEK131.7 billion. The investment firm had previously increased its stake in Evolution to above 30% in July by adding 2,050,000 shares to its portfolio.
According to Swedish law, any investor who holds at least 30% of a company's shares must make an offer for the remaining ownership.
Despite this legal requirement, Evolution's board issued a statement indicating that the offer does not accurately represent the company's fair market value. The board also suggested that Candle Lake’s proposition appears to be a means to fulfill its legal obligation rather than a genuine effort to acquire the entire company or enact significant operational 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," Evolution remarked. "The board of directors assumes that this is correct and has no reason to take a different view in any relevant respect."
Candle Lake previously indicated that should it secure over 90% ownership of Evolution, it would pursue taking the company private, thus delisting it from Nasdaq Stockholm. However, this objective is now facing challenges.
In a tumultuous period for Evolution, the company's license was nearly suspended by the UK Gambling Commission after it was revealed that its games were offered on unlicensed sites within the region. Instead of suspension, Evolution opted to settle for £4.75 million after failing to uphold adequate anti-money laundering and customer due diligence measures.
Additionally, a pending acquisition of Galaxy Gaming fell through when the deadline for completing the $85 million transaction expired in July, leading Evolution to terminate the merger agreement.
As of the opening of the Stockholm Stock Exchange today, Evolution’s shares have increased modestly by 0.51% to SEK824.20.
