Candle Lake launches SEK132 billion bid for Evolution

Candle Lake, an investment firm owned by billionaire Kenneth Dart, has launched a SEK131.7 billion (approximately £10.2 billion) offer to take Evolution private. This bid values the Stockholm-listed company at SEK695 per share, while it currently trades at SEK733, with a market capitalization of SEK138.8 billion.

Impact of the Proposed Acquisition

Candle Lake's proposal follows its purchase of over two million shares of Evolution at SEK695 each on July 24, thus surpassing the 30% ownership threshold. According to Swedish law, an investor acquiring more than 30% of a listed company's shares must launch a public offer for the remaining shares. The group has increased its stake to 31.56% and has announced that an offer document will be published around August 14.

Financing and Acceptance Timeline

The acceptance period is expected to commence around August 17 and conclude on September 15. The transaction will be financed through existing cash, liquid securities, and credit facilities. Additionally, Candle Lake conducted a limited due diligence review of Evolution.

Investor Background

Kenneth Dart, based in the Cayman Islands, has an estimated net worth of $3.7 billion according to Forbes. His family founded Dart Container, the largest manufacturer of foam cups and disposable food packaging worldwide. Dart also holds nearly 30% of Flutter Entertainment and recently acquired a 0.6% stake in Hacksaw Gaming, which triggered an 8% rise in its stock.

Investment Strategy and Group Statement

In a statement, Candle Lake expressed that "Candle Lake is a long-term investor and sees its stake in Evolution as a financial investment in a well-managed and highly profitable business." Evolution has developed since its founding in 2006 as a leader in B2B live casino solutions. No material changes to Evolution's operations or management are planned.

Conditions Precedent to Closing

Candle Lake has stated that certain regulatory and closing conditions will be required before completing any transaction. On the other hand, Evolution did not provide any comments on the matter. In the context of other actions, acquisition plans by Evolution for Galaxy Gaming were suspended in July.