Evolution Lands $13.8B Acquisition Bid from Reclusive Billionaire Kenneth Dart

Evolution AB has a $13.8 billion acquisition offer from Kenneth Dart’s Candle Lake Ltd., but it’s unlikely that the investor is looking to take full control of the Swedish gaming company.

Under the Nordic country’s laws, when an investor surpasses a 30% interest in a publicly traded company, that shareholder must make an acquisition offer. Candle Lake crossed that threshold in late July. Fueling speculation that Dart may not want majority control of Evolution is an offer premium just 1.6% to the gaming stock’s volume-weighted average trading price for the 20 trading days leading up to July 24 – the day on which Candle Lake’s stake in the online gaming company nudged above 30%. The offer is below where Evolution shares currently reside.

Other analysts believe Evolution is likely to reject the acquisition offer. If that happens, Swedish law allows Candle Lake to continue gobbling up shares of the betting outfit for another year without making a fresh takeover proposal.

Candle Lake Admits It Doesn’t Want to Own Evolution

In a 10-page disclosure released on Thursday, Aug. 13, Candle Lake made clear it doesn’t want to own Evolution outright, adding it views its stake in the company as a long-term holding while going so far as to praise management.

Dart’s company also notes that the published offer is the result of the aforementioned Swedish law and that it’s not angling for an activist role at Evolution.

“Candle Lake’s plans for the future business and general strategy of Evolution do not currently include any material changes with regard to Evolution’s future operations,” according to the disclosure document. “The Offer will not affect Candle Lake’s operations. Candle Lake also has no plans to implement any material changes.”

Dart Is Also a Major Flutter Investor

Dart, who gave up his U.S. citizenship in 1994 for tax reasons, is worth an estimated $11.2 billion, according to the Bloomberg Billionaires Index. His equity holdings have long featured “sin stocks,” including tobacco and gaming names.

His name is familiar in wagering circles because in addition to his 30% stake in Evolution, Dart owns roughly 30% of FanDuel parent Flutter Entertainment (NYSE: FLUT) through swaps.

That Flutter stake is up significantly in a matter of months, indicating the reclusive billionaire has been buying the stock as it moves lower. A regulator filing out earlier this week indicates one of Dart’s holding companies entered into a total return swap agreement for 332,237 notional shares of Flutter.