Candle Lake Limited will complete its mandatory cash offer for Evolution after shareholders tendered 111,716 shares, representing approximately 0.06% of the online gaming supplier’s share capital and votes.
The offer closed on 15 September, with settlement expected to take place around 23 September. Candle Lake declared the offer unconditional after the regulatory and governmental clearance condition for completion was satisfied.
Following settlement, Candle Lake’s holding will amount to 59.9 million Evolution shares, equivalent to approximately 31.6% of the supplier’s share capital and voting rights. It also has indirect financial exposure to another 4.0 million shares through cash-settled total return swaps, bringing its overall financial exposure to approximately 33.8%.
The outcome leaves Candle Lake’s ownership only marginally above its position before the offer. It controlled approximately 31.56% when it launched the SEK695 ($70.54)-per-share bid in August, which valued Evolution’s outstanding shares at approximately SEK131.7bn.
The mandatory offer followed Candle Lake’s acquisition of shares in July, which took its direct holding above Sweden’s 30% mandatory bid threshold. Crossing that threshold required the investor to make an offer for the remaining shares under Swedish takeover rules.
Candle Lake had stated that the offer resulted from that obligation rather than an intention to acquire full ownership. Evolution’s Board subsequently recommended that shareholders reject the SEK695 offer, citing the supplier’s market valuation, financial position and future prospects.
The takeover process has also coincided with comparatively flat financial performance at Evolution. Q2 net revenue declined 1.2% year-on-year to €517.8m, while EBITDA was €341.0m and profit for the period reached €251.4m. For the first half, net revenue was €1.03bn, EBITDA reached €676.3m and profit totalled €503.4m.
Candle Lake is wholly owned by investor Kenneth Dart. Following completion of the offer, its approximately 31.6% direct ownership remains well below the 90% level previously identified in connection with potential compulsory acquisition proceedings.
In August, Evolution’s Board unanimously recommended that shareholders reject Candle Lake’s mandatory takeover offer, arguing that the SEK695-per-share proposal did not reflect the supplier’s fair market value. The Board highlighted that the bid represented a 5.7% discount to Evolution’s closing share price immediately before the offer was announced.
Candle Lake’s additional exposure through total return swaps takes its combined direct holding and financial exposure to around 33.8%
