The future of gambling giant Evolution is suddenly looking a lot less certain after billionaire investor Kenneth Dart purchased additional shares in the company, raising his stake above 30%. This move makes him legally obligated to submit a takeover bid for the company, potentially taking it private. However, Dart’s intentions remain uncertain, as does shareholder sentiment regarding a potential deal.
Dart Is Not Forced to Offer a Premium Price
According to a July 27 filing, Dart bought 2.05 million shares in Evolution through Candle Lake Ltd., a Cayman Islands-based company that was already a significant shareholder. This move raised Candle Lake’s stake in Evolution to 30.02%, just enough to trigger a mandatory takeover bid under Dutch law.
Candle Lake now has four weeks to make a formal acquisition bid or reduce its stake below 30%. However, the company is not required to submit a competitive offer. According to Dutch law, the bid offer must at least match the highest-priced Evolution shares Candle Lake purchased in the last six months. The gambling technology giant has not yet commented on this development.
Valued at roughly $15 billion, Evolution has evolved into one of the key players in the modern gambling ecosystem. It could be a prime acquisition target for Dart, whose Candle Lake company already owns 28% of online betting giant Flutter Entertainment. While the billionaire has previously shown little interest in high-profile acquisitions, this could be about to change.
Evolution Remains Strong Despite Looming Challenges
Markets reacted favorably to Dart’s upcoming bid as Evolution’s shares surged by over 4% after the announcement. A successful takeover would likely take the company private, potentially shifting its market position. The company’s Q2 results were mixed, with net revenue and EBITDA taking a small hit, while group profits increased slightly.
If Dart does take over, he will have to deal with some immediate issues. Evolution is currently engaged in a high-profile lawsuit involving Playtech, one of its main rivals. The dispute centers on a controversial 2021 report that accused Evolution of operating in restricted markets. It caused significant damage to the company, which is now seeking compensation in court.
This development comes on the heels of another significant shift for Evolution. Last week, the company announced that its planned merger with Galaxy Gaming would not come to fruition. The two parties have confirmed that they will maintain their current business relationship. This could be fortunate for Dart, as an ongoing merger could significantly complicate the takeover process.