Evolution leadership has wasted no time in recommending that its shareholders reject Candle Lake’s mandatory offer to take the company private.
The decision comes just over a week after Kenneth Dart’s investment vehicle made a bid which valued the Sweden-headquartered and -listed gambling conglomerate at around SEK131.7bn (£10.21bn).
Though the SEK695 per-share offer was an 11-figure one (in British currency), it was highly likely to be rejected given it represented a 5.7% discount compared to the closing share price of SEK737.2 on 12 August – the final day of trading before the offer was made.
Candle Lake had already stated that it did not plan for a full takeover of Evolution unless it ultimately acquires at least 90% of its shares, which was something that the listed firm took into account when rejecting the bid.
Evolution’s justification
“The board of directors also notes that Candle Lake has expressed that the offer is not motivated by any intention to acquire all outstanding shares in Evolution and that the offer is made pursuant to Candle Lake’s mandatory offer obligation,” a statement read.
“Based on its assessment, and in light of the discount in offer compared to the company’s current share price, the board of directors considers that the Offer does not reflect the fair market value of Evolution.
“In view of the above, the board of directors recommends the shareholders to not accept the offer.”
Both firms have stated that the offer will have “no material changes” on either business, while Evolution has appointed Gernandt & Danielsson Advokatbyrå as legal advisors in connection with the offer.
Candle Lake has its fingers in many pies
The recommended rejection comes just after Kenneth Dart and Candle Lake made DraftKings its latest gambling target, taking a 5.8% stake in the US-based operator.
Candle Lake still controls around 29% of Flutter Entertainment as well as 31.56% of Evolution. It holds a 0.6% stake in Hacksaw Gaming which, like Evolution, trades on the Nasdaq Stockholm.
While Candle Lake is clearly looking for a change in fortunes for many listed gambling firms, it seems the Dart-led business has no interest in taking full control of any just yet.
