PointsBet Rejects Betr’s Takeover Proposal as MIXI Offers Superior Value

Gaming operator PointsBet has finally chosen between its suitors, opting to proceed with MIXI’s takeover proposal. The former company’s board argued that MIXI offered a superior proposal despite competitor Betr’s projected synergies.

MIXI and Betr Clashed over PointsBet

PointsBet has been in the crosshairs of potential buyers for a while, with BlueBet seeking to acquire the Australian sportsbook for AUD 340 million ($220.5 million). Earlier this year, MIXI Australia challenged this proposal and proposed to acquire PointsBet for roughly AUD 353 million (approximately $229 million).  

Betr Entertainment, which ended up acquiring BlueBet, then increased its bid, submitting an AUD 360 million offer instead. In its proposal, Betr asserted that synergies between the two companies could amount to over AUD 40 million a year, which would be equivalent to a value of AUD 1.33 per share for PointsBet shareholders.

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

PointsBet Moves Forward with the MIXI Proposal

After careful consideration, PointsBet seems to have decided to go with the MIXI proposal. The company’s board ruled that MIXI’s latest bid offered superior value, despite Betr’s synergy promises.

While Betr projected an overly optimistic value of AUD 1.33 per share for its deal, PointsBet’s leaders concluded that the true value of the offer stood at roughly AUD 1.14 per share. Compared to this, MIXI’s AUD 1.20 per share offer was a clear winner.

PointsBet also argued that the projected synergies could have been undermined by overlapping customer bases with Betr, citing something similar happening following Betr’s takeover of BlueBet.

Revenue dis-synergies will also reduce the net synergies, as a result of the high levels of customer cross-over between PointsBet and Betr and expected customer behavior.

PointsBet statement

PointsBet was also concerned about potential integration difficulties stemming from Betr’s assumption that PointsBet’s Canadian business could be carved out.

PointsBet therefore entered into a Bid Implementation Deed with MIXI and its subsidiary MIXI Australia shortly after MIXI’s takeover was approved by Australian regulators. However, the takeover is still subject to additional regulatory approvals, including ones from authorities in Ontario where PointsBet has a significant presence.