Evolution Board Formally Rejects Kenneth Dart’s Mandatory Takeover Offer

As expected, the board of Evolution AB has recommended that shareholders reject the mandatory cash takeover offer from Kenneth Dart’s Candle Lake Ltd, valued at SEK 695 per share (approx. $13.8 billion).

Dart’s offer is a purely procedural formality; under Swedish law, any investor who crosses a 30% ownership threshold in a publicly traded company is legally required to launch a buyout bid.

Candle Lake slightly surpassed that threshold late last month, prompting an acquisition offer that valued Evolution at a mere 1.6% premium to the stock’s 20-day volume-weighted average price before July 24.

Evolution’s board dismissed the proposal outright, emphasizing that Candle Lake’s bid fails to reflect the company’s true market value or long-term growth prospects.

Dart Doesn’t Want Full Control of Evolution

When the offer for Evolution was revealed, Candle Lake, Dart’s investment vehicle, made clear that it is not looking to own a majority stake in the gaming company, nor is it looking to play the role of an activist investor that pushes for major change.

While lauding Evolution management, Candle Lake noted it’s a long-term investor in the company and that it isn’t planning on acquiring all of the gaming firm’s shares.

Regarding Evolution’s day-to-day operations, executives and employees, Candle Lake isn’t seeking significant adjustments on those fronts and the board “assumes that this is correct and has no reason to take a different view in any relevant respect.”

Notably, Swedish law provides pathways for Candle Lake to continue buying shares of Evolution for up to a year following a rejection of the initial offer before another takeover bid must be made.

Dart’s Other Gaming Investments

While frequently described as reclusive, Dart is increasingly prominent in gaming investing circles — both in Sweden, across Europe and the U.S.

In addition to the Evolution stake, Candle Lake owns 0.6% of Hacksaw AB, a Swedish company that distributes content used by operators of internet casinos.

Through swaps, Dart’s holding company owns roughly 30% of the shares outstanding of FanDuel parent Flutter Entertainment (NYSE: FLUT). Last week, it was revealed that he owns 5.8% of DraftKings (NASDAQ: DKNG), meaning he’s now a major investor in the two largest U.S. online sportsbooks.