The board of directors at Evolution has advised its shareholders to reject Candle Lake Limited's recent mandatory takeover offer, which is aimed at privatizing the gaming supplier. This recommendation was made public on Monday and follows Candle Lake's cash offer to acquire all outstanding shares of Evolution, which was presented on August 13. The estimated value of the deal is approximately SEK131.7 billion.
Candle Lake increased its ownership in Evolution to over 30% earlier in July by acquiring an additional 2,050,000 shares. As per Swedish regulations, any investor owning at least 30% of a company's shares is mandated to extend an offer for the remaining shares.
In response to Candle Lake's bid, Evolution's board stated the offer does not represent the fair market value of the company. They further expressed concerns that Candle Lake's intent may not involve genuinely pursuing full ownership or implementing significant operational changes. In their statement, Evolution specified, "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."
Candle Lake has expressed that should it achieve ownership exceeding 90%, it intends to take Evolution private by delisting it from Nasdaq Stockholm. However, recent developments seem to complicate these plans. Additionally, Evolution is navigating a challenging period, having recently settled a £4.75 million case with the UK Gambling Commission for deficiencies in anti-money laundering and customer due diligence processes, rather than risking a suspension of its license.
The company also faced hurdles with its intended $85 million acquisition of Galaxy Gaming, which fell through when the closing deadline expired in July.
As of today, shares of Evolution have slightly risen by 0.51%, with a trading price of SEK824.20 on the Stockholm Stock Exchange.
