Betr continues to court PointsBet with renewed all-share takeover offer

Betr Entertainment is seeking to re-enter the takeover battle for PointsBet after lodging a new, all-scrip proposal that it said offers “compelling” value to shareholders. All-scrip refers to a company offering an exchange of shares in place of cash.

Betr’s fresh proposal offers 3.81 Betr shares for each PointsBet share, valuing each PointsBet share at AU$1.22, based on a $0.32 Betr share price.

PointsBet previously rejected an existing proposal from Betr which was worth AU$360 million. Instead PointsBet’s leadership team urged shareholders to accept an updated bid from Japanese gaming group MIXI which valued PointsBet at $402 million.

MIXI’s latest bid offered $1.20 for each PointsBet share, which was improved from its February offer of $1.06 per share, which was previously approved by the PointsBet board.

To support the offer, Betr completed an oversubscribed offering of $130 million. The Australian betting group intends to facilitate a selective buy-back of shares issued to PointsBet shareholders that accept the bid.

This, it said, will allow them to receive a cash offer of $1.22 per share. The buyback will be initially capped at $80 million but may rise to $200 million should Betr secure at least 90% of PointsBet shares.

Betr added that its offer will not be subject to any minimum acceptance condition. It said it only requires approval from its own shareholders and that of the Australian Competition and Consumer Commission.

Betr: proposal offers ‘significant’ value to PointsBet

In its proposal document, Betr said PointsBet shareholders would benefit from “significant value enhancement” in the combined business. It added that more than $40 million in material synergies would be realised under a 100% acquisition scenario.

“This is a compelling opportunity to consolidate in the Australian wagering sector,” Betr Chairman Matt Tripp said. “Our offer provides PointsBet shareholders with flexibility, either cash for immediate liquidity or the ability to participate on the long-term upside of the combined entity.

“We’re offering real value, execution certainty and the leadership experience needed to deliver.”

What does PointsBet think?

PointsBet has responded to the latest Betr deal, insisting it is “materially” below the $1.20 in cash per share offered by MIXI. It issued a short response on Friday.

PointsBet said the bid had an implied value of $1.086 per share, based on the 19 June closing price.

The operator did not make any further comment on the matter.

How does this compare to the MIXI proposal?

PointsBet has already entered a bid implementation deed with MIXI, setting out specifics of the offer. The takeover would be subject to a 50.1% minimum acceptance from shareholders and regulatory approval in Ontario, Canada, PointsBet’s remaining global market after selling its US operations to Fanatics in April last year.

Australia’s Foreign Investment Review Board has already approved the mooted takeover. Meanwhile, PointsBet shareholders had been due to vote on the MIXI proposal on 25 June.