Betr Entertainment has intensified its pursuit of PointsBet by filing an amended acquisition bid, increasing competition with rival bidder MIXI for the Australian sportsbook operator's assets. The raised bid follows Betr's recent purchase of a 19.9% stake in PointsBet, as the company is looking to expand in the sports betting and gaming sector.
Key Takeaways
- Betr has raised its PointsBet bid to AU$360 million, including cash, stock, and strategic divestments
- The offer includes secured funding and a planned sale of Canadian assets to Hard Rock
- PointsBet board still prefers MIXI’s offer, but Betr’s stake allows it to block the proposal
The new bid, officially lodged as a Scheme of Arrangement, values PointsBet at AU$360 million. The offer comprises AU$260 million in cash and AU$100 million in Betr shares.
Betr claims its offer delivers significantly more value than that of Japanese tech giant MIXI, highlighting expected annual synergies of over AU$40 million.
Based on these synergies, Betr estimates its offer could deliver a potential AU$1.33 per share valuation to PointsBet shareholders, which is a premium to the competing offer.
To finance the cash component of the offer, Betr has arranged acquisition finance facilities from National Australia Bank (NAB) totaling AU$120 million. In addition to the debt facility, the company will utilize pre-committed equity investments and asset sales to finance the acquisition's funding requirement.
The multi-faceted funding approach reduces the need to issue new equity and the accompanying dilution risk.
PointsBet Canada to Hard Rock Digital
A key component of Betr's strategy is the proposed divestment of PointsBet's Canadian business. There, Betr has entered into a conditional agreement to sell the Canadian company to Hard Rock Digital for AU$29.6 million.
This sale is pending the completion of Betr's acquisition of PointsBet and Hard Rock Digital board approval.
Should it occur, the sale would follow Hard Rock's previous acquisition of Evoke's, formerly 888 Holdings, U.S. B2C assets in 2023 and further consolidate the North American gaming market.
Proceeds from the Canadian asset sale are expected to reduce Betr's overall equity capital requirement for the acquisition from AU$160 million to AU$130 million. Investors, including Betr Chair Matt Tripp and BlueBet's former chair, Michael Sullivan, have already committed AU$20 million.
Furthermore, a AU$15 million loan note will be converted into equity as part of the acquisition's capital structure.
Betr chairman Matt Tripp stated that the company's offer was better than MIXI's, as it offered greater certainty and strategic alignment. PointsBet's board, nevertheless, continues to support the MIXI proposal and has indicated that it will only accept a bid from the Japanese bidder.
The board's backing is crucial because the success of any Scheme of Arrangement hinges on the approval of shareholders, which is led by the board's recommendations.
