Higher offer from PointsBet put forward by Betr, despite initial rejection
In a recent turn of events, Betr has lodged an improved takeover offer for PointsBet, aiming to secure a partnership that could create significant value for both companies' shareholders. However, PointsBet's board has rejected this latest all-scrip offer from Betr, favouring a cash offer from rival MIXI [1][2][3][5].
The offer from Betr is theoretically valued at AU$1.20 or $0.85 per share, with Betr offering 4.219 of its own shares for one share of PointsBet it doesn't already own [3]. Despite this, PointsBet's board remains unconvinced, primarily due to doubts about Betr's financial robustness and business model [2][3][5].
This scepticism is consistent with market practice, where acquiring companies needing to pay fully in shares, rather than cash, can raise questions over the acquirer's financial strength and business model sustainability.
PointsBet, which has a presence in Ontario, Canada, initially backed MIXI, a Japanese entertainment group, and received approval for the deal in Ontario [6]. The MIXI offer, while in cash, is considered superior to Betr's [5].
Betr, however, remains confident in its ability to secure this partnership with PointsBet. The company urges its shareholders to wait for both final offers before making a decision [1]. It believes that the combination of the two companies can create material value for both PointsBet and Betr shareholders.
It is unclear if MIXI will consider raising its offer again [7]. Meanwhile, Australia's Takeovers Panel has intervened to halt Betr from distributing its bidder's statement to PointsBet shareholders, potentially reflecting underlying concerns affecting Betr's bid execution [4].
As the situation unfolds, it appears that PointsBet's board is leaning towards MIXI's cash offer, raising questions about Betr's ability to deliver value and its long-term viability. PointsBet shareholders will likely need to schedule a vote to make a final decision on the matter.
References: 1. The Australian Financial Review 2. The Sydney Morning Herald 3. The Age 4. The Australian 5. Yahoo Finance 6. Reuters 7. CNBC
- The uncertainty surrounding Betr's financial robustness and business model, as mentioned in the discussion about the recent takeover offer for PointsBet, raises questions about its ability to deliver value and long-term viability.
- Betr's offer to acquire PointsBet in shares rather than cash, as revealed in the improved takeover bid, might create doubts for PointsBet's board, aligning with common market practices where such deals can signal concerns over the acquirer's financial strength and business model sustainability.