Evolution’s board has advised shareholders to reject Candle Lake Limited’s mandatory cash offer, arguing that the SEK 695-per-share proposal undervalues the Swedish-listed gaming technology group.
The recommendation was issued on 24 August after the board assessed Evolution’s share price, financial position, strategy, future prospects and the terms of the bid. It concluded that the offer did not represent the company’s fair market value.
Candle Lake, the investment vehicle controlled by billionaire investor Kenneth Dart, formally launched its mandatory offer on 13 August. The proposal values all outstanding Evolution shares at approximately SEK 131.7bn and offers shareholders SEK 695 in cash for each share tendered.
The mandatory bid was triggered after Candle Lake crossed Sweden’s 30% ownership threshold. The investor reached a direct holding of about 30.02% on 24 July after buying another 2.05 million Evolution shares. By the time the formal offer was announced, Candle Lake controlled 59.8 million shares, equivalent to approximately 31.56% of Evolution’s outstanding stock.
Evolution’s board highlighted the gap between the offer and the company’s market price. The SEK 695 proposal was 5.7% below Evolution’s SEK 737.20 closing price on 12 August, the final trading day before the offer was announced. It was also around 3.3% below the company’s 20-day volume-weighted average price at that point.
The board also took into account Candle Lake’s position that the transaction was being made because Swedish takeover rules required it, rather than as part of an immediate plan to acquire every remaining Evolution share. Candle Lake has said it does not expect the transaction to result in significant changes to Evolution’s operations, management, employees or business locations.
However, if Candle Lake eventually secures more than 90% of Evolution, it intends to seek compulsory redemption of the remaining shares and pursue a delisting from Nasdaq Stockholm.
The offer acceptance period opened on 17 August and is scheduled to close at 17:00 CEST on 15 September, with settlement expected to begin around 23 September. Candle Lake retains the right to amend those dates within applicable takeover rules.
Evolution has appointed Swedish law firm Gernandt & Danielsson Advokatbyrå as its legal adviser for the process.