Evolution tells shareholders to reject Candle Lake takeover bid
Evolution has urged shareholders to reject a SEK 695-per-share cash offer from Candle Lake, arguing the mandatory takeover proposal does not reflect the fair market value of the live casino giant.
The Evolution board issued its recommendation after Candle Lake, which controls approximately 30.02% of the company’s shares and voting rights, launched the mandatory cash offer on August 13.
“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,” the board said.
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“In view of the above, the board of directors recommends the shareholders to not accept the Offer.”
Candle Lake’s SEK 695 offer represents a 5.7% discount to Evolution’s SEK 737.20 closing share price on August 12, the final trading day before the offer was announced.
It also represents a 3.3% discount to Evolution’s volume-weighted average share price of SEK 718.80 over the 20 trading days through August 12.
The takeover offer was triggered after Candle Lake announced on July 24 that its direct holding in Evolution had increased to approximately 30.02%, taking it above the mandatory bid threshold under Swedish takeover law.
Candle Lake has indicated that the offer is not motivated by an intention to acquire all outstanding Evolution shares and is instead being made to meet its mandatory offer obligation.
The SEK 695 price matches Evolution’s closing share price on July 24 and represents a 1.6% premium to the company’s 20-day volume-weighted average price immediately before Candle Lake announced it had crossed the takeover threshold.
The acceptance period opened on August 17 and is expected to run until around September 15.
Evolution’s board said it considered a range of factors when assessing the proposal, including the company’s current share price, strategic and financial position, expected future development and associated opportunities and risks.
Completion of the offer is conditional on any necessary regulatory and governmental approvals. However, Candle Lake said it currently believes the customary regulatory clearances required for the offer have already been received.
Candle Lake has also told Evolution that it does not currently plan material changes to the company’s operations, strategy, management, employees or operating locations following the offer.
Evolution is one of the world’s largest suppliers of live casino gaming, with its portfolio also including online slot brands such as NetEnt, Red Tiger, Big Time Gaming and Nolimit City.
