Betr gains upper hand in PointsBet takeover battle as board declares bid 'superior'

PointsBet Holdings Ltd said on Monday that it considers a takeover proposal from Betr Entertainment to be superior to a rival bid from Japan’s MIXI Inc, marking a key shift in the closely watched acquisition contest.

The Australian bookmaker said it had reached the decision with the assistance of external advisers and has proposed a mutual due diligence process with Betr, focusing initially on the value of potential synergies and the valuation of Betr’s scrip component.

“PointsBet’s initial focus will be on the value of synergies and Betr scrip, as the implied value of the Proposal for shareholders is heavily dependent on these two elements given that the Proposal contemplates a 57% cash / 43% scrip funding mix,” the company said in a statement.

Betr, which rebranded from BlueBet earlier this year, submitted its AUD 360 million ($231 million) bid in February. The offer comprises AUD 240 million to AUD 260 million in cash, and AUD 100 million to AUD 120 million in scrip, with claimed synergies of at least AUD 40 million annually.

Despite backing the MIXI offer in February, PointsBet’s board now acknowledges Betr’s bid as the frontrunner. However, it continues to recommend MIXI’s AU$353 million scheme in the interim, pending completion of Betr’s due diligence and a review by an independent expert.

“The PointsBet board remains committed to, and unanimously recommends, that PointsBet shareholders vote in favour of the MIXI scheme, in the absence of a superior proposal and subject to the independent expert continuing to conclude that the MIXI scheme is in the best interests of PointsBet shareholders,” the board said.

The MIXI proposal, offered at AUD 1.06 per share, represents a 27.7% premium to PointsBet’s closing price on February 25, the day before the offer was disclosed. MIXI’s financial strength is underpinned by more than JP¥100 billion ($680 million) in cash and deposits as of December.

If successful, the Betr acquisition may lead to the divestiture of PointsBet’s Canada-facing operations, according to sources familiar with the matter. In April, Betr received a non-binding offer from Hard Rock Digital to acquire PointsBet Canada. Hard Rock has also applied for a gambling licence in Ontario, suggesting preparations for a potential deal are underway.

PointsBet advised shareholders that no action is required at this stage, and it will provide updates as the due diligence process progresses.