BlueBet completes TopSport acquisition
Completion follows the successful migration of TopSport customers to the BlueBet-run Betr platform overnight. BlueBet, which trades as Betr, only struck the agreement in February, finalising the deal less than two months later.
BlueBet has made a cash payment of AU$1.5 million (£735,890/€879,870/US$950,669) as part of its initial settlement. This represents the completion payment less TopSport customer account balances, pending bets and employee entitlements.
BlueBet has also issued 8,823,529 fully paid ordinary shares to TopSport’s nominee entity, Merlehan Family Investments. A further 23,000,000 performance options and additional cash payments may be due should TopSport hit certain milestones.
The acquisition, BlueBet said, brings the Betr brand closer to a 10% to 15% market share “sweet spot” in Australia.
BlueBet pledges ‘frictionless’ experience for TopSport users
The deal completes after over 63 million rows of TopSport customer data were securely migrated overnight. This includes transactional data, pending bets and account balances. Doing so, BlueBet said, ensures a frictionless experience for TopSport customers, who will now have access to the Betr platform.
In addition, TopSport CEO Tristan Merlehan has joined the BlueBet management team. He takes on the role of chief trading officer within the enlarged business.
Commenting on the purchase, BlueBet CEO Andrew Menz highlighted the pace at which the deal was able to complete.
“We have successfully completed the acquisition of TopSport, executing an innovative transaction structure that enabled us to migrate TopSport customers onto the Betr platform prior to completion,” Menz said.
“This materially de-risked the transaction and ensured that all anticipated cost synergies were fully realised within just 55 days of announcing the deal. This was without the need to operate the TopSport brand or wagering platform during the transition.
“This outcome reflects our repeatable and scalable M&A model, underpinned by the speed and precision of our migration team. Our ability to rapidly execute on the integration and migration with no disruption to our offering remains a key competitive advantage, delivering immediate value for our shareholders.”
BlueBet still keen on PointsBet deal
Menz also took the opportunity to update on BlueBet’s pursuit of PointsBet.
In February, BlueBet tabled a bid worth $360 million to acquire PointsBet. This comprises a cash pool of $240 million to $260 million, plus scrip consideration of $100 million to $120 million. In addition, BlueBet has identified synergies of at least $40 million annually.
The offer represents a scrip bid which, in Australia, 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. BlueBet estimates more than 20% of PointsBet shareholders would prefer a transaction including a scrip component over a cash proposal.
However, it has not been straightforward for BlueBet. In February, PointsBet approved a rival bid from MIXI Australia. This scheme arrangement would transfer 100% of PointsBet’s shareholding to the Australian arm of Japanese digital entertainment and sports group, MIXI Inc.
Should PointsBet shareholders also approve the deal, they would receive cash consideration of $1.06 per share as part of the deal. This represents a significant premium of 27.7% to PointsBet’s closing price on 25 February, totalling around $353 million.
A vote to approve the deal will occur in late May
While uncertainty remains over the MIXI bid, Menz maintains that BlueBet has in place an attractive offer. He added that further talks with the PointsBet board are planned.
“With the successful integration of TopSport, our focus now shifts to further inorganic growth opportunities in the Australian market, including our compelling and fully funded proposal to acquire PointsBet,” he said.
“By providing the flexibility for PointsBet shareholders to choose a mix of cash and scrip, we believe ours is a superior proposal for shareholders to realise value in the short and long term.
“Our engagement with PointsBet shareholders remains overwhelmingly positive and we look forward to progressing our discussions with the PointsBet board.”