The board of Evolution has advised shareholders to reject a recent takeover bid from Candle Lake Limited, which aims to privatize the gaming supplier. This recommendation was made public on Monday, following Candle Lake's cash offer on August 13 to acquire all of Evolution's outstanding shares. This potential deal could value the company at approximately SEK131.7 billion.
Candle Lake raised its stake in Evolution to over 30% in July by purchasing an additional 2,050,000 shares. Under Swedish regulations, any investor owning at least 30% of a company must extend an offer for the remaining shares.
In response to the takeover bid, Evolution's board issued a statement asserting that the offer does not represent the company's fair market value. The board further expressed concerns, suggesting that Candle Lake's motivation for the offer was primarily to fulfill its legal obligations rather than a genuine interest in acquiring the entire company or implementing significant changes.
According to Evolution, Candle Lake has indicated that its future plans for the business and overall strategy do not foresee any major alterations to Evolution’s operations post-acquisition. The board trusts this assessment and has no reason to dispute it.
Candle Lake had previously communicated intentions to take Evolution private if it secured more than 90% ownership, which would lead to the company’s delisting from Nasdaq Stockholm. However, these aspirations may now be complicated.
Evolution has faced a series of challenges recently, including a potential license suspension by the UK Gambling Commission for allowing its games to be available on unlicensed websites. Instead of suspension, the company opted to settle for £4.75 million due to deficiencies in its anti-money laundering and customer due diligence practices.
Additionally, a planned acquisition of Galaxy Gaming, valued at $85 million, fell through as the designated closing period expired in July, leading Evolution to terminate the merger agreement.
As of today, Evolution's shares have seen a slight uptick of 0.51%, trading at SEK824.20 on the Stockholm Stock Exchange.
