PointsBet engages with DraftKings premium buyout offer

PointsBet has issued an official update on the ongoing sale proceedings of its US and North American assets now that a second bidder has entered the race. Previously, the company received a proposal from Fanatics, an apparel company that is expanding rapidly into the sports betting landscape through its own Fanatics Sportsbook division.

The previous offer tabled $150m payable to PointsBet to transfer the assets, but this may now change, as DraftKings, one of the leading companies in the gaming and betting market in the United States, has offered a 30% premium on that offer, proposing a buyout price of $195m instead. After several days of silence, PointsBet issued an update on Monday and confirmed that it had received the update and had engaged with it.

DraftKings is offering to pay the full sum in cash on a debt-free and cash-free basis without any financing conditions, making it a tempting offer for the company to consider on the whole. As a result, the Directors at PointsBet have noted that the current DraftKings proposal could indeed lead to a Superior Proposal, or in other words – move forward with the deal.

However, PointsBet has cautioned in its official update that there is presently no obligation on behalf of DraftKings to move on with a binding definitive agreement. Therefore, nothing will change in the proposed sale of PointsBet to Fanatics without further engagement and commitment by the second bidder.

The current proposal is not a binding offer or commitment, PointsBet confirmed. In light of this, the Board of Directors has still recommended shareholders vote in favor of the Fanatics proposal during the upcoming Extraordinary General Meeting to be held on Friday, June30, 2023.

PointsBet has set out some conditions before it even considers moving forward with any discussions. For one, PointsBet Non-Executive Chairman Brett Paton has asked DraftKings CEO Jason Robins, and his team, to provide written confirmation that the company is prepared to assume the risk of delay and/or denial of antitrust approvals.

Paton is contrasting the matter with how much more simplified it would be to complete the transactions with Fanatics Sportsbook instead. There is also the matter of cash burn of the US business, with PointsBet’s cash burn at $21m from July 1, 2023, as per the Fanatics Sportsbook proposal. DraftKings would need to provide further information on this and all points as well if it wishes to proceed, PointsBet stated.

Image credit: Unsplash.com