Betr edges ahead in PointsBet takeover race as proposal declared ‘superior’
Betr Entertainment has seemingly gained the advantage in the takeover battle for PointsBet after the company declared the proposed offer from digital wagering operator as “superior”.
In a statement released today, PointsBet said it had reached the decision with the assistance of external advisers. The company has now proposed a mutual due diligence be undertaken with Betr.
This due diligence, PointsBet said, will be phased, with an initial focus on the value of synergies and Betr’s scrip. In Australia, a scrip is a takeover offer where shares are offered partly or wholly in place of cash. The scrip is a document given to shareholders showing they should receive a certain number of stocks.
Betr tabled its bid worth AUS$360 million (US$231 million) in February, prior to its rebrand from BlueBet. This comprised a cash pool of between $240 million to $260 million, plus scrip consideration of $100 million to $120 million. In addition, Betr identified synergies of at least $40 million annually.
PointsBet said shareholders did not need to take any action at this time and it would issue further updates as appropriate.
Where does the PointsBet declaration leave MIXI?
While the declaration may give Betr the edge, PointsBet’s position on a rival bid from MIXI Australia remains unchanged. An independent expert is in the process of reviewing the MIXI offer, after a takeover was proposed in February.
PointsBet approved the initial proposal from MIXI Australia, at the time. This scheme arrangement proposed the transfer of 100% of PointsBet’s shareholding to the Australian arm of Japanese digital entertainment and sports group, MIXI Inc.
The MIXI deal would see shareholders would receive cash consideration of $1.06 per share. This represents a premium of 27.7% to PointsBet’s closing price on 25 February – the day before the offer landed – totalling approximately $353 million.
While the PointsBet board considers Betr’s proposal “superior”, it continues to recommend its shareholders vote in favour of the MIXI offer.
“The PointsBet board remains committed to, and unanimously recommends, that PointsBet shareholders vote in favour of the MIXI scheme, in the absence of a superior proposal [from Betr] and subject to the independent expert continuing to conclude that the MIXI scheme is in the best interests of PointsBet shareholders,” the company said.
According to a December balance sheet, MIXI had over JP¥100 billion or AUD1 billion of cash and deposits.
What could a Betr deal mean for PointsBet?
Should PointsBet opt for the Betr proposal, this could lead to the company being partially broken up.
Sources familiar with the proposal have suggested Betr could sell off the Canada-facing business of PointsBet. This would allow it to focus on the operator’s core Australian operations.
In April, Betr confirmed it received a non-binding proposal from Hard Rock Digital to acquire PointsBet Canada. Reports emerged last week that Hard Rock Digital has also applied for an online gambling licence in Ontario in anticipation of a deal being agreed.
Of course, any sale of PointsBet Canada would depend on Betr acquiring the entire PointsBet business. However, the reports, coupled with PointsBet’s “superior” declaration, suggest the momentum is now with Betr.