PointsBet Picks MIXI Over Betr After Reviewing Offers

PointsBet has put an end to the takeover battle by rejecting Betr Entertainment’s bid and moving ahead with a better offer from MIXI Australia. The decision comes after a months-long standoff between the two suitors, each aiming to acquire PointsBet’s remaining international business.

Good to know

• MIXI’s updated offer is worth AU$402 million or $261 million.
• Shareholders would receive $1.20 per share, a 44.6% premium from late February’s closing price.
• PointsBet’s board flagged Betr’s projections as unrealistic and its integration plan as risky.

After reviewing both offers, PointsBet’s board found MIXI’s proposal to be stronger. MIXI put forward its revised offer in early June, pushing the valuation up to AU$402 million. That put it ahead of Betr’s offer, which totaled around $360 million. In response, PointsBet signed a bid implementation deed with MIXI, confirming the board’s support and laying out the next steps for the deal.

One major condition is that at least 50.1% of shareholders must approve the offer. In addition, regulators in Ontario, Canada, where PointsBet still operates following the sale of its US division to Fanatics in 2023, must also sign off. Approval from Australia’s Foreign Investment Review Board has already been granted.

The final shareholder vote is set for June 25. If all goes smoothly, MIXI will officially take over PointsBet’s business outside Australia.

Why Betr’s Offer Did Not Make the Cut

Back in May, Betr had the upper hand. At the time, its proposal had been described as “superior” by PointsBet’s own board. But things changed after MIXI returned with an improved bid.

The updated analysis from PointsBet revealed a few key issues with Betr’s approach. First, Betr’s $1.20-per-share offer was actually lower in total value than MIXI’s, coming in $42 million short.

Second, PointsBet’s board pointed to several operational concerns. It argued that Betr overestimated potential cost savings and underestimated how much investment would be needed to grow the business. It also warned that too much overlap existed between Betr and PointsBet’s customer bases, which could have led to loss of revenue through cannibalisation.

Another major concern was how Betr planned to manage PointsBet’s Canadian division. According to PointsBet, the assumptions made by Betr around carving out the Canadian business were flawed, creating added complexity and lowering the chance of success.

In its statement, PointsBet underlined the gap between its internal evaluation and Betr’s projections. “The key reason for the difference in value is the calculations underpinning Betr’s value are reliant on a number of assumptions that PointsBet considers to be unrealistic,” the board said.

With shareholder and regulatory approvals pending, PointsBet has said it will keep the market informed as the MIXI deal progresses.

The post PointsBet Picks MIXI Over Betr After Reviewing Offers appeared first on iGaming.org.