Betr edges ahead in PointsBet takeover race as proposal declared ‘superior’

The PointsBet board considers Betr’s offer to be stronger than MIXI’s bid.

PointsBet Betr MIXI

Betr Entertainment has taken the lead in the takeover contest for PointsBet, after the company labeled the wagering operator’s offer as “superior.”

On Monday, PointsBet released a statement confirming the decision, supported by advice from external consultants. The business has now suggested a joint due diligence process with Betr.

This due diligence, PointsBet added, will be rolled out in phases, starting with assessing the value of synergies and Betr’s scrip. In Australia, a scrip is a takeover method where shares are exchanged partly or fully instead of cash. The document informs shareholders of the number of shares they will be entitled to receive.

Betr submitted its AU$360 million (US$231 million) bid in February, before completing its rebrand from BlueBet. The proposal included a cash pool between $240 million and $260 million, plus $100 million to $120 million in scrip. Additionally, Betr highlighted potential annual synergies of at least $40 million.

PointsBet said its shareholders do not need to take any action yet and that further announcements would follow.

Where does the PointsBet declaration leave MIXI?

Although Betr may now hold the advantage, PointsBet’s stance on the rival MIXI Australia bid is unchanged. An independent expert is still evaluating the MIXI offer, submitted in February.

At that time, PointsBet approved MIXI Australia’s initial scheme, which proposed transferring all of PointsBet’s shares to MIXI Inc.’s Australian division, a Japanese sports and entertainment firm.

Under this plan, shareholders would receive $1.06 in cash per share, representing a 27.7% premium on PointsBet’s 25 February closing price, the day before the bid was made. This valued the deal at around $353 million.

Despite calling Betr’s bid “superior,” PointsBet still recommends shareholders vote in favor of MIXI’s scheme.

“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 [from Betr] and provided the independent expert continues to find the MIXI scheme in the best interests of PointsBet shareholders,” the company stated.

Based on a December balance sheet, MIXI had cash and deposits totaling over JP¥100 billion (approximately AUD1 billion).

What could a Betr deal mean for PointsBet?

If PointsBet moves forward with Betr’s proposal, it could result in parts of the company being separated.

Sources close to the talks have suggested Betr may sell PointsBet’s Canada-facing business, enabling it to concentrate on the operator’s main Australian market.

In April, Betr admitted it had received a non-binding proposal from Hard Rock Digital to acquire PointsBet Canada. Recent reports also indicated that Hard Rock Digital has applied for an Ontario online gambling license, likely in preparation for the acquisition.

Naturally, any potential sale of PointsBet Canada would depend on Betr completing its full takeover of PointsBet. Still, the latest reports, combined with PointsBet’s statement of a “superior” proposal, suggest that Betr now holds the momentum.