Australian sportsbook Betr has seen a newly increased offer to acquire PointsBet rejected again after the latter company enlisted the Australian government to intervene.
In its latest all-share offer filed on July 30, Betr offered 4.219 of its own shares in exchange for every PointsBet share not already owned by Betr. As the firm said about its previous bid, which offered 3.81 shares per outstanding share, Betr is confident its proposal is “superior” to the all-cash bid from Japanese company MIXI.
That MIXI offer, of $1.20 AUD per PointsBet share, has been unanimously recommended by PointsBet’s board. Betr says its latest proposal equates to $1.35 AUD per PointsBet share.
“We continue to firmly believe in the combination rationale and that we can create material value for PointsBet and Betr shareholders by integrating these two businesses, allowing us to profitably grow our share of the Australian wagering market,” Betr said in a statement. “That upside is not available to PointsBet shareholders under the inferior all-cash MIXI offer.
“PointsBet shareholders should continue to take no action until both offers are open. We expect the PointsBet board will reconsider its recommendation that PointsBet shareholders accept the MIXI offer and will now recommend the Betr offer.”
Betr’s offer includes a provision to sell PointsBet Canada‘s assets, including all current and future Canadian operations and market licenses, customer databases and intellectual property, to Hard Rock Digital for around $40.5 million CAD.
Despite its plea, PointsBet again rejected its compatriot sportsbook’s latest bid.
MIXI quietly builds superior shareholding
Betr already owns 19.6% of PointsBet, which initially appeared to give it something of an advantage over MIXI in the battle to take over the Ontario-licensed sportsbook and online casino.
However, as the back-and-forth continues, MIXI Australia has quietly built up its own shareholding and now owns more of PointsBet than Betr does — around 25% as of July 30.
Plus, as well as the shareholding advantage and the recommendation of PointsBet’s leadership, MIXI’s attempt to buy PointsBet has already satisfied all gaming regulatory approvals, including from Australia’s Foreign Investment Review Board and from the Alcohol and Gaming Commission of Ontario (AGCO).
Government steps in after PointsBet request
PointsBet rejected Betr’s previous offer last week, citing the share-dependent nature of the bid, Betr’s “less valuable and volatile VIP-heavy customer base” and “sub-scale” horse racing-heavy betting business as reasons. PointsBet also claimed that due diligence found that 65% of PointsBet and Betr’s aggregate net win comes from customers who have an account on both sportsbooks, a crossover which it said limited the appeal of the deal.
This week, before Betr filed its newest bid on July 30, PointsBet appealed to the Australian government’s Takeovers Panel, asking it to intervene against Betr’s previous “highly misleading” proposal.
PointsBet also accused Betr of inflating its own share price by announcing an $80 million AUD selective buy-back for shareholders who accepted the previous bid, and claimed that Betr chairman Matthew Tripp failed to disclose the true extent of his and his associates’ voting power within Betr.
The Takeovers Panel’s response was to issue an interim order to restrain Betr from dispatching its bidder’s statement. Betr swerved the issue by launching its newest bid hours later.
MIXI’s current bid only requires 50% approval. MIXI’s entire 25% holding will presumably vote in favour, giving it a strong chance of passing this time around after the previous on-market proposal did not get the required 75% support at a shareholders’ vote in late June.
