Evolution board calls for shareholders to reject of Candle Lake offer

Evolution’s board has recommended that its shareholders reject Candle Lake Limited’s recent mandatory takeover offer, which is expected to help it take the gaming supplier private.

The recommendation, announced on Monday, follows a mandatory public cash offer made by Kenneth Dart’s investment vehicle Candle Lake on 13 August to acquire all of Evolution’s outstanding shares.

The deal could value the company at around SEK131.7 billion.

Candle Lake increased its stake in Evolution to above 30% in July, when it acquired an additional 2,050,000 shares.

Under Swedish law, any single investor that owns at least 30% of a company’s shares must make an offer for the remainder of the business.

However following the bid, Evolution’s board released a statement noting that the offer “does not reflect the fair market value of Evolution”.

Additionally, Evolution claimed Candle Lake has only made the offer to meet its obligation, rather than it having any real appetite to acquire the full company, or make any material changes to the business.

“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 stated.

“The board of directors assumes that this is correct and has no reason to take a different view in any relevant respect.”

Evolution to stay public

Candle Lake previously stated that if it obtained ownership of Evolution exceeding 90%, it would look to take the company private, delisting it from Nasdaq Stockholm.

But while those plans look to have hit a stumbling block, it has certainly been an interesting time of late for Evolution.

Its licence was close to being suspended by the UK Gambling Commission, after the company’s games were found to have been offered on unlicensed websites in the jurisdiction.

Instead, the company paid a £4.75 million settlement for failing to maintain sufficient anti-money laundering and customer due diligence controls.

The Swedish business’ deal to acquire Galaxy Gaming then fell through, with the closing period for the $85 million deal expiring in July, at which point Evolution terminated the merger agreement.

Since the Stockholm Stock Exchange opened today, Evolution’s stock has edged up by 0.51% to SEK824.20.

Kyle Goldsmith

Kyle has been with Clarion since December 2023, joining from the world of sports journalism, subsequently becoming a LatAm-facing senior reporter with iGB.