Evolution Board Tells Shareholders to Reject Kenneth Dart’s Takeover Bid

Evolution AB’s board of directors has told shareholders to reject a mandatory cash takeover offer from Candle Lake Limited, an investment vehicle controlled by billionaire Kenneth Dart. The board says the SEK 695-per-share bid, worth roughly $73, undervalues the Swedish live-casino games supplier, according to Gambling Insider.

Candle Lake launched the offer on August 13 after crossing Sweden’s 30% mandatory-bid threshold in late July. Under Swedish takeover rules, an investor that passes that mark must either bid for the remaining shares within four weeks or reduce its stake below it.

Share price has already outrun the bid

The offer price matched Evolution’s SEK 695 closing price on July 24, the day before Candle Lake disclosed it had crossed the threshold. At the time, that was a modest 1.6% premium to the 20-day volume-weighted average price.

Evolution kept climbing. By August 12, the day before the offer was formally announced, shares had reached SEK 737.2, turning the bid into a discount rather than a premium. As of Tuesday, shares were trading near SEK 833, about 20% above what Candle Lake is offering.

The board said it weighed the current share price, Evolution’s strategic and financial position, and its expected future development before reaching its recommendation. “The board of directors considers that the Offer does not reflect the fair market value of Evolution,” it said, citing the discount to the market price.

A profitable target with a buyback underway

Evolution’s most recent quarterly results back up the board’s case. Net revenue came in at €517.8 million, down 1.2% year over year but up 2.4% at constant exchange rates. EBITDA hit €341 million, a 65.9% margin.

The company also repurchased about €303 million of its own shares in the quarter, part of a €2-billion buyback program. Evolution is one of the largest suppliers of live-dealer casino games worldwide, technology used by regulated online casino operators, including many active in Ontario’s igaming market.

Dart says he isn’t after full control

Candle Lake, which began building its Evolution position in mid-2024, holds roughly 59.8 million shares, or 31.56% of outstanding shares and votes as of August 13. Counting cash-settled total return swaps, its total financial exposure sits near 32.04%.

Candle Lake has described the stake as a long-term financial investment in a “well-managed, highly profitable business.” It says it does not intend to acquire all outstanding shares or make material changes to Evolution’s operations, management or staff.

Still, if Candle Lake’s holding eventually tops 90%, the firm intends to pursue compulsory redemption of remaining shares and seek to delist Evolution from Nasdaq Stockholm. The offer values the company at roughly SEK 131.7 billion, about $13.85 billion.

The acceptance period for the offer runs through September 15, with settlement expected around September 23. Evolution shareholders now face a choice between a fixed cash price and a market that, so far, is betting the company is worth considerably more.