The directors of Evolution have recommended shareholders to not to accept the mandatory cash offer of Candle Lake Limited of SEK695 ($72.89) per share on the grounds that the bid has not fairly represented the true value of the gaming supplier.
This recommendation was made by the board on Monday, after Candle Lake announced its mandatory offer on 13 August for acquiring all the remaining shares in the company.
This offer values Evolution at around SEK131.7 billion and Candle Lake, which is an investment entity owned by billionaire Kenneth Dart, had received a green signal to increase its ownership above the limit of 30% threshold limit in July after buying over 2.05 million shares.
This recommendation comes along with the fact that under Swedish takeover laws any investor with an ownership crossing 30% must make an offer for the shares of the remaining shareholders.
Evolution stated:
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. The board of directors assumes that this is correct and has no reason to take a different view in any relevant respect.
This recommendation has come amidst difficult times for Evolution that recently settled its case against the UK Gambling Commission for £4.75 million in June due to its game operating on unauthorized websites and the regulator’s findings of problems with its AML and due diligence practices.
Evolution also failed to buy Galaxy Gaming for $85 million after the merger agreement was terminated in July after the transaction’s closing period expired and Evolution terminated the merger agreement.
Evolution shares were trading at approximately SEK824.20, up 0.51% at the time of reporting, well above Candle Lake’s SEK695 offer price.
