Candle Lake Offers SEK132bn to Acquire Evolution Gaming

Candle Lake, an investment firm owned by billionaire Kenneth Dart, has submitted a SEK131.7bn bid to take the Stockholm-listed Evolution Gaming private. This offer values the live casino and slots company at SEK695 per share, although Evolution currently trades at SEK733, giving it a market cap of SEK138.8bn.

Key Details of the Offer

On July 24, Candle Lake purchased over two million shares of Evolution for SEK695 each, passing the 30% ownership benchmark. Under Swedish law, this mandatory threshold requires Candle Lake to make a bid for the rest of the company. The offer involves acquiring approximately 130 million outstanding shares, with financing sourced from the firm's existing cash, liquid securities, and credit facilities.

Candle Lake's ownership has increased to 31.56%, as confirmed by the firm, which stated: “The transaction would be financed via a combination of existing resources.” An offer document is expected around August 14, with the acceptance period slated to begin on August 17 and close on September 15.

Legal and Strategic Insights

Roschier Advokatbyrå serves as Candle Lake’s legal adviser for the transaction. While conducting a limited due diligence review, Candle Lake described Evolution as a "well-managed, highly profitable business." According to the firm’s statement, no major operational changes for Evolution are planned following the acquisition.

Kenneth Dart’s Investment Strategy

Candle Lake is known for long-term investments, with Kenneth Dart holding significant stakes in industries like tobacco and gambling. Dart, based in the Cayman Islands, controls nearly 30% of Flutter Entertainment and has recently purchased a 0.6% stake in Hacksaw Gaming, which resulted in an 8% share price increase.

Evolution has refused to comment on the bid. However, the company has faced recent challenges, such as shelving plans to acquire Galaxy Gaming in July after an earlier $85m deal. Moreover, Evolution is involved in legal actions against Playtech over a short seller report.

The Market's Response

Candle Lake’s bid highlights its confidence in Evolution’s strategic and operational strength. Evolution, founded in 2006, is a leader in B2B live casino solutions and regarded highly by Candle Lake. The deal awaits regulatory approvals and must meet closing conditions before completion.

In response to the proposal, Evolution has not made any public statements, but the iGaming sector is closely watching how this substantial offer unfolds.