PointsBet Requests ASX Trading Halt Due to Material Transaction

Acquisition target PointsBet sent a letter to the Australian Securities Exchange (ASX) this morning to request a trading halt of its stock due to a material announcement.

Disclosure Obligations

PointsBet requested the immediate implementation of a trading halt on its securities listed on the ASX to allow it to manage its continuous disclosure obligations in relation to a material transaction as per ASX Listing Rule 17.1.

The Australian-based sports betting operator is at the center of an acquisition tussle between the sports commercial giant with a huge appetite in the sports betting space, Fanatics, and the second-largest in terms of sports wagering market share in the US, DraftKings.

Last month, Fanatics thought they had wrapped up a $150 million deal to acquire the US assets of PointsBet as both sides agreed to the deal under the terms of which Fanatics would pay $100 million upon transaction close and the rest in February 2024. The nascent sportsbook went live in its second US state, Maryland, in early June.

On June 16, Boston-based sports betting and gaming operator DraftKings tabled a 30% higher bid, $195 million, for PointsBet USA and derailed the agreement between PointsBet and Fanatics. A recent media report also suggested that personal motives dating back to a failed merger deal in 2021 may exist behind the risky bid.

Upon receiving the proposal from DraftKings, PointsBet said its previous agreement with Fanatics was inferior and began looking into the new bid. There is one stumbling block in the proposal as it is subject to DraftKings obtaining regulatory approvals while PointsBet insists on a “hell or high water deal” deal.

Trading Halt for One Day

In its letter to the ASX, PointsBet requested that the trading halt remains in place until the company makes its announcement to the market but no later than the commencement of normal trading on June 28, 2023, meaning that trading with PointsBet stock should be suspended for no more than a trading day.

PointsBet concluded its letter by stating that the company “is not aware of any reason why the trading halt request should not be granted, nor of any other information necessary to inform the market about the trading halt.”