Betr Entertainment has lodged another improved takeover proposal for PointsBet Holdings, expressing confidence the offer is “superior” to a rival bid from MIXI Australia.
In its latest all-share offer, Betr has offered 4.219 of its own shares in exchange for every PointsBet share. This applies to all PointsBet shares not already owned by the operator. This, it said, makes its proposal “superior” to MIXI’s current all-cash bid of $1.20 per PointsBet share.
Betr’s latest offer equated to AU$1.35 per PointsBet share, based on its capital raising price of $0.32 per share. This is also based on $0.321, the most recent closing price for Betr shares.
The offer is also based on $1.33 per PointsBet share based on the two-day volume weighted average price of its shares of $0.3161.
Betr intends to further increase its offer after the formal opening of its offer.
“We continue to firmly believe in the combination rationale and that we can create material value for PointsBet and Betr shareholders by integrating these two businesses, allowing us to profitably grow our share of the Australian wagering market,” Betr said.
“That upside is not available to PoinstBet shareholders under the inferior all-cash MIXI offer.
“PointsBet shareholders should continue to take no action until both offers are open. We expect the PointsBet board will reconsider its recommendation that PointsBet shareholders accept the MIXI offer and will now recommend the Betr offer.”
PointsBet complains to government over existing Betr proposal
The new offer is the latest chapter in the courting battle between MIXI and Betr for PointsBet.
PointsBet had rejected the previous proposal from Betr, as it was “materially less” than MIXI’s increased offer.
Betr was proposing 3.81 of its own shares in exchange for each PointsBet share. It said this on-market offer equated to AU$1.22 per PointsBet share, based on a Betr share price of $0.32.
This also included $44.9 million of expected annual cost synergies, which provided a potential deal value of $1.89 per PointsBet share.
However, without estimated synergy costs, the offer was the same as an earlier proposal, also rejected by PointsBet.
Also included in this offer was an $80 million selective buy-back for PointsBet shareholders accepting the bid. However, PointsBet took issue with this, and indeed the wider bid, raising it with the government’s Takeover Panel.
PointsBet said the Betr proposal was “highly misleading” and “unbalanced”, also flagging concerns over the expected synergies and how these skewed the value of the offer. It also accused Betr of inflating its own share price by announcing details of the buy-back.
In addition, PointsBet hit out at the actions of Betr Executive Chaiman Matthew Tripp. It said that he failed to disclose the true extent of his and his associates’ voting power in Betr. The wagering operator currently had a 19.9% holding in PointsBet.
Responding to the complaint, the Takeovers Panel restrained Betr from despatching its bidder’s statement. This, however, applied to the existing bid, with Betr’s latest proposal coming several hours after this announcement.
PointsBet Groundhog Day: Betr vs. MIXI
While PointsBet is yet to respond to the new Betr offer, it has been steadfast in its support for MIXI. The PointsBet board has recommended shareholders accept several offers from MIXI, including the latest tabled in mid-July.
MIXI’s all-cash proposal offers AU$1.20 per share in PointsBet. This implies an enterprise value of AU$402 million (US$260 million) for the operator. This is the same as an earlier offer that failed to progress but requires lower acceptance from shareholders.
The only reason its earlier bid failed was due to it not gaining enough shareholder support. This was ultimately down to Betr.
PointsBet held a shareholder vote on the MIXI offer on 25 June, with 95.69% approving the offer. However, the proxy vote was more mixed, with 69.47% backing the proposal.
Betr then accused PointsBet of “impermissibly excluding” its vote against without reason, saying its proxy vote was not included in the final tally.
An investigation found a system error excluded Betr votes. PointsBet organised a recount, with the updated results showing 70.48% of all votes cast in the poll were in favour of the proposal, with 29.52% against. Therefore, the scheme resolution was not carried forward, and the MIXI proposal was not approved.
However, with MIXI’s new bid, which is now open, only requiring 50% approval, this raises the chances of it passing. PointsBet is yet to schedule a vote on the latest offer, with Betr’s improved proposal potentially throwing a spanner in the works, again.
Betr said its latest proposal is worth $1.35 per PointsBet share, ahead of MIXI’s $1.20 per share offer.