Candle Lake Limited has formally launched its mandatory cash offer for Evolution AB, opening a process that could ultimately take the online casino supplier off Nasdaq Stockholm if the investment vehicle gains more than 90% ownership.
The Cayman Islands-based company, wholly owned by investor Kenneth Dart, is offering SEK 695 in cash for each Evolution share it does not already control. Based on Evolution’s 189.45 million outstanding shares, the offer values the company at approximately SEK 131.7 billion, while the remaining shares covered by the bid are worth about SEK 90.1 billion.
The offer became mandatory after Candle Lake bought another 2.05 million Evolution shares in July, taking its holding above Sweden’s 30% takeover threshold. Candle Lake currently controls 59.8 million shares, equivalent to roughly 31.56% of Evolution’s outstanding stock. Including exposure through cash-settled total return swaps, its total economic exposure is around 32.04%.
The SEK 695 offer matches Evolution’s closing price on 24 July and stood 1.6% above the previous 20-day volume-weighted average at that point. However, it was 5.7% below Evolution’s SEK 737.20 closing price on 12 August.
Candle Lake said it regards Evolution as a long-term financial investment and is not seeking major changes to the company’s operations, management, workforce or locations. The offer is fully financed using cash, liquid securities and committed credit facilities.
The acceptance period opened on 17 August and is scheduled to run until 15 September, with settlement expected from around 23 September. The offer document was approved and registered by Sweden’s Financial Supervisory Authority on 14 August.
If Candle Lake eventually secures more than 90% of Evolution’s outstanding shares, it plans to begin compulsory redemption of the remaining stock and pursue Evolution’s delisting from Nasdaq Stockholm. Evolution’s board is required to publish its assessment of the offer before the acceptance period ends.
The bid comes during an active period for Evolution. In July, the company terminated its planned acquisition of Galaxy Gaming while maintaining their existing commercial relationship. Evolution also agreed to pay £4.75 million following a UK Gambling Commission investigation into its games appearing on six unlicensed gambling websites accessible from Great Britain.