Fanatics ups PointsBet US offer to $225m as DraftKings’ deadline passes
PointsBet board unanimously supports revised bid and reveals DraftKings failed to firm up 11th hour interest in the US assets
Fanatics Betting and Gaming (FBG) has increased its bid for PointsBet’s US division by $75m to $225m, submitting a second offer for the assets.
The revised offer is on the same terms as its earlier $150m tabled in May, which had been gazumped by DraftKings’ non-binding $195m bid. DraftKings’ offer had been under consideration by PointsBet’s board following its submission on June 16.
FBG’s offer for PointsBet US, which would provide access to 15 US states and PointsBet’s in-house tech and trading capabilities, represents a 50% increase on its previous bid. This would mean $175m was paid at initial completion with a further $50m to be paid at a later date.
DraftKings is understood to have not met PointsBet’s terms to firm up its proposal and missed the deadline of June 27.
In anticipation of the revised proposal, PointsBet had asked for a trading halt on its shares on the Australian Securities Exchange (ASX), pending a “material transaction” on June 27.
PointsBet’s board has already indicated their support for the revised FBG bid, which will be voted on by shareholders at an extraordinary general meeting (EGM) at PointsBet’s Melbourne office on June 30.
If the shareholders back the deal, they will receive a distribution of share capital, based on share values of between A$1.39 and $1.44 per share.
PointsBet chairman Brett Paton praised FBG’s approach to the process, welcoming the additional $75m consideration on behalf of shareholders.
“The improved proposal delivers PointsBet shareholders a 50%, or $75m, increase to the acquisition price originally agreed with Fanatics Betting and Gaming,” Paton said.
“Following the receipt of a non-binding indicative offer for our US Business from DraftKings on June 16, 2023, the PointsBet team entered negotiations with both parties.”
Paton continued: “The board unanimously supports the improved proposal from Fanatics Betting and Gaming, which provides a superior price plus certainty. Fanatics Betting and Gaming conducted their diligence process and negotiations in a highly professional manner at all times.
“The offer to ‘front end’ the additional consideration is an element which we regarded as a welcome and significant benefit to our shareholders.
“Subject to shareholder and regulatory approvals, our US team will have a strong future as part of the Fanatics Betting and Gaming group and PointsBet will build on the opportunities in Australia and Canada underpinned by a strong balance sheet,” the chairman concluded.
PointsBet shares remained flat in trading today, up just 0.61% at the close to A$1.64.
DraftKings confirmed its withdrawal from the PointsBet USA bidding process in a short one-line statement.
“DraftKings today announced that the company is no longer pursuing the acquisition of the US business of PointsBet Holdings Ltd. The company thanks PointsBet for their time and access over recent weeks,” the Boston-headquartered operator said.