Fantasma Games

This statement is made by the Independent Bid Committee[1] of Fantasma pursuant to Rule II. 19 of the Takeover rules for certain trading platforms (the "Takeover rules").

Background

EveryMatrix Software Limited ("EveryMatrix"), has today, on 18 September 2024, announced a public cash offer to the shareholders of Fantasma to tender all their shares in the Company to EveryMatrix (the "Offer"). EveryMatrix offers a cash consideration of SEK 59 per share in Fantasma, corresponding to a value of all shares in the Company of SEK 209.8 million[2].

The Offer represents a premium of:

• 21.40 per cent compared to the closing price of Fantasma's shares on Nasdaq First North on 17 September 2024 of SEK 48.60; and
• 27.69 per cent compared to the volume-weighted average price of Fantasma's shares on Nasdaq First North during the 30 latest trading days up to and including 17 September 2024 of SEK 46.21; and
• 33.41 per cent compared to the volume-weighted average price of Fantasma's shares on Nasdaq First North during the 90 latest trading days up to and including 17 September 2024 of SEK 44.22.

EveryMatrix expects to publish the offer document regarding the Offer today on 18 September 2024. The acceptance period for the Offer is expected to commence on 19 September 2024 and end on or around 10 October 2024, subject to any extensions.

Completion of the Offer is conditional upon, among other things, the Offer being accepted to such extent that EveryMatrix becomes the owner of more than 90 per cent of the total number of outstanding shares in the Company (on a fully diluted basis). EveryMatrix has reserved the right to waive one or several of the conditions for completion of the Offer. 

The Board of Directors of Fantasma have, at the written request of EveryMatrix, permitted EveryMatrix to carry out a limited confirmatory due diligence review of Fantasma in connection with the preparation of the Offer. In connection with such review, EveryMatrix has not received any inside information. However, EveryMatrix has received certain information regarding the Company's budget for 2024. For the full year 2024, Fantasma has forecasted that the group's total net sales will grow by approximately 33 per cent compared to the full year 2023, as compared to the financial target of 30 per cent communicated by Fantasma. Similarly, the EBITDA margin is expected to correspond to approximately 47 per cent, as compared to the financial target of 50 per cent communicated by Fantasma.

EveryMatrix has obtained irrevocable undertakings to accept the Offer from several of the Company's largest shareholders:

• Fredrik Johansson, holding 503,762 shares (497,762 directly and 6,000 indirectly through CF Digital Developments AB), corresponding to 14.16 per cent of all shares in Fantasma;
• Karl Lindstedt, holding 309,379 shares, corresponding to 8.70 per cent of all shares in Fantasma;
• Christina Andersson, holding 207,832 shares, corresponding to 5.84 per cent of all shares in Fantasma;
• KL Capital[3], holding 207,671 shares, corresponding to 5.84 per cent of all shares in Fantasma;
• Martin Fagerlund, holding 182,445 shares (20,000 directly and 162,445 indirectly through Dundo AB), corresponding to 5.13 per cent of all shares in Fantasma;
• Oliver Jönsson, holding 160,000 shares, corresponding to 4.50 per cent of all shares in Fantasma;
• Tianzhi Zhou, holding 152,669 shares, corresponding to 4.29 per cent of all shares in Fantasma; and
• Eric Holmberg, holding 82,700 shares, corresponding to 2.33 per cent of all shares in Fantasma.

The undertakings to accept the Offer terminate if another party announces a competing offer for all shares in Fantasma at an offer consideration per share exceeding the Offer consideration by at least 20 per cent and EveryMatrix does not within 10 business days from the announcement of such competing offer announce an increase of the Offer consideration so that the new price per share under the Offer matches or exceeds the offer consideration per share under the competing offer. The 20 per cent hurdle and the right for EveryMatrix to match a competing offer apply to each and every competing offer as well as each and every increase of the offer consideration under any competing offer.

Accordingly, irrevocable undertakings to accept the Offer from shareholders representing in total 50.79 per cent of all shares in Fantasma have been obtained.

Eric Holmberg and Martin Fagerlund are board members and have (directly and indirectly through wholly-owned companies) undertaken towards EveryMatrix to accept the Offer. Simon Blomqvist is a board member of Fantasma and represents the shareholder KL Capital AB which has undertaken towards EveryMatrix to accept the Offer. Consequently, Eric Holmberg, Martin Fagerlund and Simon Blomqvist have a conflict of interest pursuant to Rule II.18 of the Takeover rules. For this reason, Eric Holmberg, Martin Fagerlund and Simon Blomqvist have not participated in the resolution to recommend the shareholders of Fantasma to accept the Offer, and Fantasma has formed an independent bid committee to handle the Offer.

Fantasma's Independent Bid Committee, comprising the independent members of Fantasma's board of directors Antonia Svensson, Johan Styren and Johan Köningslehner, recommends the shareholders of Fantasma to accept the Offer.

For further information regarding the Offer, please refer to the press release published today by EveryMatrix and the offer document expected to be published today on 18 September 2024.

The Independent Bid Committee's evaluation of the Offer

In its evaluation of the Offer, the Independent Bid Committee has taken a number of factors into account which they deem relevant, including, but not limited to, the Company's present strategic and financial position, prevailing market conditions and the Company's expected future development as well as opportunities and risks related thereto.

In particular, the Independent Bid Committee wishes to highlight the following considerations made in connection with their recommendation.

1. Market sentiment

The Independent Bid Committee considers Fantasma's business model to be robust, operating in a resilient part of the iGaming value chain, with attractive growth prospects. At the same time, the Independent Bid Committee notes that the uncertain macroeconomic climate, marked by high inflation and interest rates, has significantly shifted the capital market sentiment. Investors are increasingly more inclined to invest in larger companies with a diversified revenue base rather than smaller firms with a greater reliance on individual projects. In addition, the Independent Bid Committee acknowledges the risks and potential negative effects on the Company and its business stemming from the highly competitive markets in which it operates, as well as the possible impact of unfavourable regulatory changes or other shifts in the Company's markets. These factors, individually or collectively, may cause actual revenue growth or underlying profitability to differ from the Company's communicated budget and/or financial targets, thereby affecting the Company's ability to deliver value to its shareholders.

2. Changed conditions for listed iGaming companies in Sweden

The Independent Bid Committee are aware that during the last few years several reputable primarily Swedish, but to some extent also international, institutions have taken the internal stance to distance themselves from the iGaming sector following changed investment mandates and new internal directives regarding sustainability. As time has passed by, the Independent Bid Committee does not see a potential near term reversal of this trend. Consequently, the Independent Bid Committee believes that access to institutional capital for iGaming companies listed in Sweden will continue to be subdue, which in turn means that it will be harder to effectively finance the business as a publicly listed company and that the benefits of being a publicly listed company remain limited.

3. Liquidity in the stock

The Independent Bid Committee notes that the level of liquidity in the Fantasma share is low, and that this is unlikely to change in the near-term due to the concentrated shareholding.

4. Considerations regarding bid premium

The Independent Bid Committee notes that the Offer represents a premium of 21.40 per cent compared to the closing price of Fantasma's  shares on Nasdaq First North Growth Market on 17 September 2024, the last trading day before the announcement of the Offer, and a premium of 26.69 per cent, 27.69 per cent and 33.41 per cent compared to the volume-weighted average share price of Fantasma's shares on Nasdaq First North Growth Market during the last 5, 30 and 90 trading days, respectively, before the announcement of the Offer. The Independent Bid Committee notes that the bid premiums are in line with other announced bids on Nasdaq First North Growth Market in recent time.

5. View of existing shareholders

Several shareholders with long ownership history and deep understanding of the Company's operations and future prospects have entered into commitments to accept the Offer, under certain conditions. These owners, who together hold a total of 50.79 per cent of the total number of shares and votes in Fantasma Games, include Fredrik Johansson (CEO and co-founder), Karl Lindstedt, KL Capital AB, Christina Andersson, Oliver Jönsson, Martin Fagerlund (Board member), Tianzhi Zhou (Chief Product Officer) and Eric Holmberg (Chairman of the Board).

6. Long term value considerations

While the long-term value potential of Fantasma is not fully reflected in its share price today, the likelihood of realising such value is uncertain and is associated with risks. The Independent Bid Committee can not argue that the risk adjusted long-term value potential exceeds the value of the Offer.

As part of its evaluation of the Offer, the Independent Bid Committee has also investigated other potential opportunities including potential interest from other parties.

The Independent Bid Committee has reviewed RedEye's equity analysis with a target price above the offer price. It also notes that the given target price range is very broad, cementing RedEye's difficulty in assessing a single fair value of the stock due to the uncertainty surrounding the Company's future financial performance.

In accordance with Rules II.19 and IV.3 of the Takeover rules, the Independent Bid Committee has obtained a fairness opinion (attached to this press release) from the independent expert Svalner Skatt & Transaktion KB ("Svalner") according to which the Offer, in Svalner's opinion, is fair to Fantasma's shareholders from a financial point of view. Svalner receives a fixed fee for the fairness opinion that is not dependent on the outcome of the Offer.

The Independent Bid Committee has retained Penser by Carnegie and Carnegie Investment Bank AB (publ) as financial advisors and Snellman Advokatbyrå AB as legal advisor in connection with the Offer.

The Independent Bid Committee's recommendation

In view of the above, the Independent Bid Committee unanimously recommends the shareholders of Fantasma to accept the Offer.

Impact on Fantasma and its organisation

Pursuant to the Takeover rules, the Independent Bid Committee shall, based on the content of EveryMatrix's announcement of the Offer, present its opinion regarding the impact that the implementation of the Offer may have on the Company, particularly in terms of employment, and its opinion regarding EveryMatrix's strategic plans for Fantasma and the effects it is anticipated that such plans will have on employment and on the locations where the Company conducts its operations. In the announcement of the Offer, EveryMatrix states the following:

"EveryMatrix does not intend to implement any material changes to Fantasma's employees and management team or to the existing organisation and operations, including the terms of employment and the locations where Fantasma conducts its business."

The Independent Bid Committee assumes that this is a correct description and has no reason to take a different view in relevant aspects.

This statement shall in all respects be governed by and construed in accordance with substantive Swedish law. Disputes arising from this statement shall be settled exclusively by Swedish Courts.

Stockholm, 18 September 2024

Fantasma Games AB (publ)

The Independent Bid Committee

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[1] Eric Holmberg, Chairman of the Board, and Martin Fagerlund, Board member, have undertaken towards EveryMatrix to accept the Offer. Taking into account the contractual relationship between EveryMatrix, Eric Holmberg and Martin Fagerlund and the Takeover rules, Eric Holmberg and Martin Fagerblad has not participated, and will not participate, in the Independent Bid Committee's handling of or resolutions regarding matters related to the Offer.

[2] Based on a total number of shares of 3,556,535. In the event that Fantasma should pay any dividend or make any other value transfer prior to the settlement of the Offer, the price per share in the Offer will be reduced accordingly.

[3] Simon Blomqvist represents KL Capital AB on Fantasma's board of directors. Due to this, Simon Blomqvist is considered to have a conflict of interest according to section II.18 of the Takeover rules and has therefore not participated in the decision to recommend Fantasma's shareholders to accept the Offer.

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For further information, please contact:

Johan Königslehner, Chairman of the Independent Bid Committee

Tel: +46 70-726 92 00

Email: johan@frankfred.com

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About Fantasma Games AB (publ)

Fantasma Games, listed on Nasdaq First North, is a game studio based in Stockholm that was founded in 2016. The company aims to develop high-quality games and carries a vision of creating "slots beyond gambling." The continuously growing game portfolio includes titles such as Prometheus: Titan of Fire, Fortune Llama, Heroes Hunt Megaways™, Hades: River of Souls, and Medallion, all of which have been highly appreciated by players worldwide. Today, our games are available through over 250 operators, including well-known names such as BetMGM, DraftKings, LeoVegas, Paddy Power, and Betsson.

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This information is information that Fantasma Games AB (publ) is obliged to make public pursuant to the EU market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above, at 18 September 08:05 CEST.