PointsBet has officially said no to Betr. After weeks of due diligence and back-and-forth, the Australian-listed operator has shut the door on the rival offer and reaffirmed its support for a AU$1.20 ($0.80) per share cash deal from Japan’s MIXI Inc.
In an announcement on the 16th of June, PointsBet’s board revealed it unanimously decided to reject the takeover proposal lodged by Betr Entertainment Ltd on April 29th. The reason? Simply put, the MIXI deal was deemed better – cleaner, clearer, and ultimately more valuable.
The board’s assessment found that Betr had overcooked its synergy estimates, underestimated the revenue dis-synergies, and failed to account for the integration hurdles involved. With the help of external advisors, PointsBet concluded that Betr’s bid was not a “Superior Proposal” under the agreed terms of the MIXI Scheme and the associated off-market takeover offer.
Betr, which already owns a minority stake in PointsBet, had proposed to buy the remaining 80.1 percent of the company (or roughly 266 million shares) via a complex mix of cash and scrip. Shareholders could choose to receive:
-AU$1.20 ($0.80) in cash per share (subject to a cap of AU$181 million or $121 million),
-Around 2.7 Betr shares for every PointsBet share (worth about AU$0.86 or $0.57 per share based on 13th of June prices), or
-A combination of both, with caps in place for each pool.
But here’s the kicker: no matter what shareholders picked, they were always going to be scaled back if the funding pool for that option was oversubscribed. The structure baked in a blended value for the total shareholder base, calculated as 57 percent of AU$1.20 plus 43 percent of the market value of the Betr scrip. Based on current numbers, that blend worked out to less than the full AU$1.20 per share MIXI was offering across the board.
While Betr’s offer faded, MIXI has been busy firming up its play. PointsBet has now entered into a Bid Implementation Deed with MIXI and its local subsidiary, MIXI Australia Pty Ltd. Under the terms, if the shareholder vote to approve the original scheme fails, MIXI will pivot to an off-market takeover at the same price – AU$1.20 ($0.80) cash per share.
