MIXI makes improved takeover offer for PointsBet
MIXI Australia has submitted an improved takeover offer worth AU$402 million (US$260 million) for PointsBet, surpassing a rival proposal from Betr Entertainment.
PointsBet had already approved a proposal from Japanese digital entertainment and sports group MIXI‘s Australian arm back in February. The initial offer was valued at $353 million, with PointsBet shareholders to receive cash consideration of $1.06, a premium of 27.7% to closing price on 25 February.
However, Betr last month appeared to have gained an upper hand, with the PointsBet board declaring its offer “superior” in May. The Betr proposal, also put forth in February prior to its rebrand from BlueBet, was valued at $360 million.
MIXI has returned to the table with a fresh offer. This sets out how PointsBet shareholders would receive $1.20 per share, representing a 44.6% premium on the 25 February closing price of $0.83.
This also implied PointsBet has an enterprise value of $402 million, some $49 million above the previous figure.
PointsBet confirmed the news on Tuesday and initiated a trading halt on the Australian Stock Exchange. The group said it expects to resume trading no later than Thursday, once a decision has been made.
Off-market takeover a possibility for MIXI
As a further incentive, the new proposal also includes another route if shareholders do not approve the offer. Payment terms would be similar but would require only half of PointsBet shareholders to give the deal the green light.
Referred to as an “off-market takeover”, shareholders would still receive $1.20 in cash for each of their shares.
MIXI noted it is still in the process of finalising the terms of any takeover offer. It added there is no certainty any takeover will take place.
To allow shareholders to consider the new proposal, a scheme meeting scheduled for 12 June has been pushed back to 25 June. This has been approved by the Federal Court of Australia.
The PointsBet board has retained its “unanimous” recommendation that shareholders vote in favour of the improved proposal. This, however, is only in the absence of another “superior” offer.
Where does this leave Betr?
The PointsBet board’s comments have left the door open for Betr. Its proposal was previously seen as superior by the board but is now valued significantly lower than the new MIXI offer.
PointsBet and Betr are currently carrying out due diligence over this proposal, 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’s $360 million proposal comprises a cash pool of between $240 million and $260 million, plus scrip consideration of $100 million to $120 million. In addition, Betr identified synergies of at least $40 million annually.
“PointsBet and Betr are continuing with the due diligence as the PointsBet board, with the input of its external advisers, further assesses the Betr proposal in light of the improved proposal,” PointsBet said.
“PointsBet will keep shareholders and the market informed of any material developments in relation to the Betr proposal.”