Evolution's Board recommends voting against Dart’s takeover offer

• Evolution urges shareholders to reject takeover bid from billionaire investor
• Candle Stake Limited is fulfilling an obligation under Swedish law, but also has plans for the acquisition
• Evolution believes that the offer tabled by the 30-plus-percent shareholder is underpaying

Kenneth Dart is making a play for Evolution, one of the world’s largest gambling companies, suppliers of cutting-edge content and innovation for the iGaming sector.

Dart initiates obligatory offer for Evolution’s takeover

Dart, who increased his ownership to over 30% in July, has triggered a mandatory clause under Swedish law, allowing him to automatically bid for the remainder of the business and assume full control.

The billionaire investor and his Candle Lake Limited investment vehicle have taken up on that, tabling a SEK131.7bn offer, amounting to roughly $13.84bn. The offer was placed at SEK695 per share, or a 5.7% discount on the SEK732.2 stock price at the time of tabling the offer.

However, Evolution’s Board of Directors has now has now urged shareholders to reject Dart’s bid, citing insufficient value of the offer.

According to the Board, Dart’s offer was underpaying for Evolution’s current market value and worth in the space, and noted that Dart was simply fulfilling his legal obligation under the law.

Not reflecting the company’s real value, the Board says

"Based on its assessment, and in light of the discount 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 all this, the board of directors recommends that the shareholders not accept the offer," the Board stated.

While the offer looks good on paper, Evolution’s Board is convinced that the company is only set to continue driving strong performance in the long-run, delivering on new growth targets, and thus deeming the current offer to be a heavy discount of what Evolution is actually worth.

Candle Lake Limited has also noted that it would seek to delist Evolution from NASDAQ were it to ever acquire 90% stake in the company.

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