Evolution Board Rejects Kenneth Dart's $13.8bn Takeover Bid

Candle Lake, a Cayman Islands company wholly owned by Dart, was obliged to make the offer after its shareholding in Evolution passed the 30% mandatory-bid threshold in late July, following a share purchase disclosed on July 24. 

Candle Lake's offer document, published on August 14, valued Evolution's roughly 189.4 million shares at SEK695 apiece; the acceptance period runs from August 17 to September 15, with settlement due to begin on September 23.

In its statement, Evolution's board said the SEK695 offer price was below the SEK733.30 share price recorded on August 13, the day Candle Lake announced the bid, and represented a discount to the stock's 20-day volume-weighted average price. 

“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 company said, adding that its board recommends shareholders not accept the offer.

The board also noted that Candle Lake had itself said the bid was not motivated by any intention to acquire all outstanding Evolution shares, but was instead made purely to satisfy its mandatory offer obligation under Swedish takeover law. 

Candle Lake has said it has no plans for material changes to Evolution's operations, sites or employment terms, and that if acceptances push its holding above 90%, it would move to compulsory redemption of the remaining minority stake.

Evolution shares have traded well above the offer price since the announcement, climbing to around SEK825 in the days that followed, comfortably ahead of the SEK695 bid. 

Dart built his Evolution stake alongside a separate, previously disclosed holding in Flutter Entertainment, and the deal has already drawn commentary in the Swedish press over corporate governance risk, given the size of his position.

Evolution is one of the largest suppliers of live casino and RNG games to online casino sites worldwide, and its shares trade on Nasdaq Stockholm. 

The size of Candle Lake's stake and Dart's parallel position in Flutter Entertainment have drawn wider attention in Swedish financial media to corporate governance risk at Evolution, given how concentrated Dart's holding has become.

Under Swedish takeover rules, Evolution's board was required to publish its formal opinion on the offer no later than two weeks before the acceptance period's close, a deadline that fell on September 1. 

Candle Lake's SEK695 per-share price represented a 1.6% premium to the 20-day volume-weighted average price through July 24, but a discount of roughly 3.3% to the equivalent average through August 12, illustrating how far the stock had already moved above the bid level before the board's rejection.

Evolution's board framed its rejection as a straightforward valuation judgement rather than a broader objection to Dart's presence on the shareholder register, repeatedly stressing in its statement that the offer price itself, not Candle Lake's ownership stake, was the basis for its recommendation.