Japanese company Mixi apparently won the takeover battle for PointsBet in the last minute as Betr’s offer failed to convince shareholders.
Betr, formerly known as BlueBet, appeared to be in pole position to acquire PointsBet after submitting a second offer and entering due diligence discussions.
However, just as everyone saw Betr as the new owner of PointsBet, during the negotiations, Japanese firm Mixi stepped in with an improved proposal and swayed the takeover process in its favour.
As a result, PointsBet’s board has officially ended talks with Betr and is now unanimously recommending that shareholders accept Mixi’s improved offer.
Mixi, which already operates an Australian gaming subsidiary and is looking to strengthen its presence in the market, has proposed acquiring 100% of PointsBet’s shares via a scheme of arrangement at AU$ 1.20 per share.
If this arrangement fails, Mixi and PointsBet have agreed to a fallback plan through a Bid Implementation Deed, which in turn allows Mixi to launch an off-market takeover bid at the same price.
Commenting on this development, PointsBet stated that the offer of Betr was “materially below” the one proposed by Mixi, noting that it was varying between AU$1.04 and AU$1.14 per share, and never surpassing the AU$1.20 offered by Mixi.
PointsBet also stated that the cost synergies proposed by Betr were of limited value, stating:
Betr’s offer been materially overstated, having regard to PointsBet’s view of the brand and digital investment required to sustain growth and retain customers, and the levels of product and technology investment required to sustain a ‘number four’ market position (especially in the higher growth ‘sports’ category, where PointsBet is currently much stronger than Betr).
Additionally, PointsBet stated that revenue dis-synergies would further decline the net benefits of the deal, citing a high degree of customer overlap between PointsBet and Betr, along with expected customer behaviour.
PointsBet concluded:
Significant integration and implementation challenges, with Betr assuming that PointsBet’s Canadian business can be carved out and large synergies realized concurrently (which will likely further reduce the achievability of synergies).
