Betr Alleges PointsBet Didn’t Act in Good Faith in Favoring MIXI’s Proposal

Betr Entertainment Limited has responded to PointsBet’s decision to pick MIXI as its preferred suitor, saying that it will vote against the MIXI proposal. In the meantime, Betr reiterated its claim that its own proposal is superior.

Betr Suggests Pointsbet Did Not Act in Good Faith

In an official ASX release, Betr regretted that PointsBet has decided to proceed with MIXI Australia’s takeover proposal “despite the significant advantages” offered by Betr’s proposal.

Betr’s board of directors reiterated its confidence that its proposal and the AUD 40 million in synergies it could deliver would be of higher value to PointsBet than the revised MIXI takeover deal.

For context, the MIXI arrangement would deliver an approximate value of AUD 1.20 per share. While accounting for Betr’s projected synergies, its deal would deliver a value of AUD 1.33 per share instead.

While PointsBet expressed certain doubt that Betr would be able to optimize its purported synergies, the latter company emphasized that it has an “unparalleled track record in delivering shareholder value through successfully-integrated acquisitions.”

Betr further stated that PointsBet’s decision to opt for the MIXI takeover “raises questions as to whether PointsBet has acted constructively and in good faith to fully understand the benefits of the betr Proposal for its shareholders.”

In particular, we note that the MIXI Proposal provides for the accelerated 100% vesting of management performance rights, which is not conditional on future service. By contrast, betr has not committed to cash-out management performance rights and the betr Proposal will require management to remain employed and satisfy the relevant vesting milestones in the ordinary course.

Betr statement

Betr Reiterates Confidence in AUD 1.33 Value

Betr added that, as the largest shareholder in PointsBet, it will vote against the MIXI proposal at the upcoming meeting on June 25. Betr added that it believes that there are other PointsBet shareholders who agree with its points and suggested that it is likely that the MIXI proposal will fail to secure the shareholder backing it needs.

Andrew Menz. Betr’s chief executive officer, said:

We categorically reject PointsBet’s characterisation of our cost synergy projections as being ‘materially overstated’. Our team has deep experience in this field and our unparallelled track record speaks for itself.

Andrew Menz, CEO, Betr

Menz added that the synergy projection is based on reliable data and that Betr is “highly confident” in its ability to deliver AUD 1.33 of value for PointsBet shareholders.

A Little Backstory

PointsBet has been in the crosshairs of potential buyers for a while, with BlueBet first proposing to acquire its business for AUD 340 million ($220.5 million). Earlier this year, MIXI Australia challenged this proposal and put AUD 353 million on the table.

Betr Entertainment, which acquired BlueBet, then increased its bid, submitting an AUD 360 million offer instead, asserting that AUD 40 million in synergies would deliver a total value of AUD 1.33 per share.

PointsBet’s leadership acknowledged Betr’s proposal as a superior one but did not strike down the MIXI proposal immediately. As a result, MIXI revised its offer and returned with an even juicier proposal, offering PointsBet AUD 402 million ($261 million) instead, equivalent to a value of AUD 1.20 per share.