Every saga must come to an end. Well, given modern movie studios’ affinity for sequels and spin-offs, perhaps that’s not always true. But we may finally be nearing the end of the back-and-forth chronicles of the battle to buy online sportsbook and casino PointsBet.
PointsBet stated this week that all of its directors have now accepted the all-cash offer from the Australian offshoot of Japanese entertainment company MIXI. It unanimously recommends that its shareholders accept the offer.
MIXI filed its self-described “best and final” bid of AU$1.25 (approx. C$1.11) per share earlier this month. MIXI needs to secure 50.1% of PointsBet shares for the takeover to go through.
Final offer, part two
Despite MIXI labeling that offer its last, it increased its proposal on Aug. 21, to a value of AU$1.30 (C$1.16) per share. The newest bid is contingent on MIXI acquiring at least 90% of the total PointsBet holding. If it doesn’t meet that threshold, the AU$1.25-per-share offer with 50.1% approval will apply. To allow shareholders time to consider the new alternative proposal, MIXI has extended the acceptance deadline from Aug. 25 to Aug. 29.
But MIXI’s rival in the race to buy PointsBet, Australian sportsbook Betr, will vote its 19% holding against MIXI’s proposals, meaning that the 90%-threshold alternative offer is destined to fail.
Still, the stars seem to be aligning for MIXI to complete the takeover one way or another. It has already secured all required gaming regulatory approvals for the mooted takeover, including from the Alcohol and Gaming Commission of Ontario (AGCO). PointsBet operates online sports betting and online casino.
MIXI has also quietly built up its existing stake in PointsBet in recent weeks and now holds 37.12% acceptance as of Aug. 21.
Per the Australian Financial Review, EasyGo Holdings, the parent company of Stake.com, has provided its 5% stake in PointsBet in support of the MIXI bid. Several PointsBet directors have also pledged shares towards the MIXI deal. For example, this week, director Becky Kay Harris disposed of all of her 29,020 shares, “resulting from acceptance of MIXI’s off-market takeover offer following MIXI’s offer being declared unconditional.”
Betr to just leave it alone?
MIXI is closing in on sealing the deal despite Betr formally opening its own off-market, all-stock takeover offer for all shares in PointsBet that it does not already own.
Betr has offered 4.219 Betr shares for each outstanding PointsBet share, a deal it says values PointsBet at up to AU$1.35 (C$1.20) per share. As part of its proposal, Betr announced an intention to sell PointsBet Canada to Hard Rock Digital for US$29.6 million (C$41 million as of Aug. 20).
Betr pointed in its replacement bidder statement to potential annual cost savings of around AU$45 million (C$40.1 million). Betr also argues that a combined Betr-PointsBet business would give it over 10% market share in the sector. However, PointsBet previously voiced serious concerns about Betr’s takeover attempts and questioned the potential upside of a deal. After appealing to Australia’s Takeovers Panel, Betr resubmitted its bid with clearer disclosures and risk statements.
Betr’s offer is scheduled to close on Sept. 25 unless extended or withdrawn, but the point may well be moot by then.
PointsBet’s preference for the MIXI deal remains strong, and we could get a resolution as soon as next week. It is unclear what, if anything, about PointsBet Canada’s operations would change if the MIXI takeover goes through.
