90%
75%
USA
Canada
Australia
UKKenneth Dart Launches Mandatory Offer for Evolution After Crossing 30% Stake
Key Highlights
- Billionaire Kenneth Dart has made a required takeover offer for Evolution after his ownership passed Sweden’s 30% limit.
- Swedish takeover rules require an investor to make an offer for the rest of a company after its ownership rises above 30%.
- Candle Lake has offered SEK 695 ($72.68) per share, which values the online casino software company at about SEK 132 billion ($13.8 billion).
Billionaire investor Kenneth Dart has made a takeover offer for Evolution after raising his ownership of the Swedish gaming company above an important limit.
Dart’s Evolution Stake Triggers Required Offer
Dart owns the Evolution shares through his investment company Candle Lake, which now holds 30.02% of Evolution. That puts his ownership stake slightly above the 30% threshold as required by Swedish law for a potential takeover offer.
Candle Lake has offered SEK 695 ($72.68) for each Evolution share it doesn’t already own. That price values the company at about SEK 132 billion ($13.8 billion). However, Evolution shares recently traded at about SEK 733 ($76.66), which is higher than the offer price. That gives shareholders little reason to accept the deal at its current price.
The offer is expected to run from August 17 through September 15, depending on any required approvals. Evolution also recently agreed to pay about $6.3 million to the UK Gambling Commission after its games were found available to British players through unlicensed operators.
Candle Lake Doesn’t Plan a Full Takeover
Candle Lake says it views Evolution, one of the top online casino software providers, as a long-term investment and doesn’t plan to buy the whole company. The investment company also said it doesn’t plan to change Evolution’s business, management team, or workforce.
Analysts at the independent investment banking firm Jefferies believe Candle Lake’s offer was primarily to adhere to Swedish takeover rules rather than a serious takeover attempt. Since Evolution’s share price is higher than the offer, many investors may decide to keep their shares.
The process could also give Dart more freedom later. Jefferies analysts said Candle Lake may be able to buy more Evolution shares after the required offer ends without immediately having to make another takeover offer.
Dart Adds to His Gambling Investments
Evolution isn’t the only major gambling company in Dart’s investment portfolio. The 71-year-old billionaire also owns about 29% of Flutter Entertainment, the company behind FanDuel, Paddy Power, and Betfair. His estimated fortune is around $11.1 billion.
Dart has recently increased his focus on gambling companies after cutting large investments in British American Tobacco and Imperial Brands.
Instead of a potential takeover, the Evolution deal could instead give Dart more room to increase his stake in the gaming giant after the offer ends. That makes his future share purchases worth watching as he continues to build his position in the gambling industry.
