After months of acquisition battles, Australian sports betting operator PointsBet has made its stance clear, formally rejecting the acquisition proposal from Betr Entertainment and instead supporting a more attractive offer from MIXI Australia.
The PointsBet board stated that the updated offer from MIXI, proposed in early June, was evaluated as "superior," with a total value of AUD 402 million (approximately USD 261 million), significantly higher than the offer from Betr. According to the proposal, PointsBet shareholders will receive AUD 1.20 per share, a 44.6% premium over the company's closing price of AUD 0.83 on February 25, and also higher than the AUD 1.06 per share offer previously supported by the board in February.
To facilitate the progress of the transaction, PointsBet has signed a definitive agreement with MIXI. The agreement stipulates that the acquisition requires the support of at least 50.1% of shareholders and approval from the regulatory authorities in Ontario, Canada. Since selling its U.S. operations to Fanatics last year, Ontario has become PointsBet's only remaining international market. Last week, the Australian Foreign Investment Review Board approved the transaction, further clearing the way.
Shareholders will vote on the acquisition on June 25. PointsBet stated that it will release more updates when appropriate.
Why reject Betr?
Betr was briefly considered a potential "preferred bidder" in May this year, when the board initially rated its offer as "more attractive," but MIXI subsequently raised its bid quickly, turning the situation around. After completing due diligence on Betr's proposal, PointsBet ultimately rejected its acquisition plan.
Firstly, Betr's total offer was only about AUD 360 million, nearly AUD 42 million less than MIXI's current bid. Secondly, PointsBet pointed out that the cost synergies Betr claimed to achieve were "severely exaggerated," and noted that Betr's business plan required substantial investment in brand restructuring and digital platforms, making it difficult to realize the synergistic value described.
Additionally, PointsBet noted that there was a high overlap in customer bases between the two parties, and differences in user behavior could lead to revenue cannibalization. The company was also concerned about the execution risks during the integration process with Betr, especially given Betr's plan to divest its Canadian business in exchange for synergistic effects, which the PointsBet board considered "overly optimistic and difficult to achieve."
In summary, PointsBet stated that its valuation of Betr's proposal was significantly lower than its assessment of MIXI's offer. The board believed that Betr's value calculation relied on a series of unrealistic assumptions, and therefore decided to abandon the proposal and fully support MIXI's acquisition offer.
