Evolution shareholders are nearing crunch time to decide on a bid made for the company, but it seems that the man behind the offer is the one with some bigger choices to make.
Kenneth Dart made a takeover bid of SEK695 (£52.80) per share for the entirety of Evolution via his Candle Lake investment vehicle, which was a formality after his shareholding in the company crossed 30%, triggering a mandatory offer.
It has already been made clear that Dart does not want to take over Evolution currently, and the Stockholm-listed iGaming supplier’s board has already recommended that the offer be rejected.
Shareholders would’ve already been likely to reject the offer as, even at the time, it represented a 5.7% discount on Evolution’s closing share price on 12 August.
The disparity between the offer and the firm’s stock has only grown, as Evolution shares have risen by a considerable 21% since that date.
Decision on Dart’s offer due today
The deadline for Evolution shareholders to approve the takeover is today (15 September).
However, the likely rejection of Dart’s takeover bid, which is expected to be announced sometime next week, will not be a huge concern for the investor.
As stated above, he clearly does not have much interest in acquiring the firm, and after a hypothetical rejection vote will retain his large shareholding in the company, one of the largest listed firms in the gambling space with market cap of £13.5bn.
Bigger fish to fry?
This makes Evolution the third biggest listed gambling company in the world, ahead of £12.95bn-valued Flutter Entertainment – another company in which Dart’s investments are well-documented.
While the Evolution vote will take place today, it is Flutter that may be causing more trouble in the varied gambling investment portfolio of the Cayman Islands-based billionaire.
Dart has not touched his Flutter shares in nearly a month. His control of the business has now passed 30% and he is only exempt from a mandatory takeover offer as around 12% of that control comes via total return swaps.
That 12% holding via those swaps could come back to haunt Dart though, as Flutter’s shares have been decimated on the New York Stock Exchange over the past 12 months.
The firm remains in the midst of a much-publicised share price crash, with its stock having suffered a 63.8% decline in the last year.
Dart has been financially interested in Flutter and Evolution in 2024. Flutter shares are down by over $66 since the start of that year.
The investor is exposed to a loss in the shares’ value in March 2028, when they expire, so is pinning his hopes on a turnaround in Flutter’s stock which doesn’t seem to be arriving.
His pedigree is not to be sniffed at though, and a man who has made so many successful investments in the past – more recently in the tobacco industry – should not have his opinion written off just yet.
A recent move to take a 5.8% stake in DraftKings has further solidified Dart’s confidence in the gambling sector, as he continues to keep faith in major industry PLCs around the board.
It doesn’t seem likely that there’ll be a 180 for Dart’s plans as he makes it an iGaming treble via the DraftKings investment.