PointBet Holdings has called for an immediate suspension of trading on the Australian Securities Exchange (ASX) days before shareholders were due to vote on the Fanatics takeover offer.
The operator today (June 27) submitted a request to allow the administration of ongoing disclosure obligations for “significant transactions.”
If approved, the suspension will continue until the start of normal trading tomorrow (June 28) or the announcement, whichever comes first.
PointsBet added that it was not aware of the reasons why the request could not be granted or any other information required to notify the market of the suspension.
As such, no further details have been revealed at this time. However, this comes ahead of a shareholder vote scheduled for June 30 on Fanatics’ proposal to acquire PointBet’s US operations.
Draft Kings enter the race
The deal suspension comes after DraftKings submitted a rival offer to acquire PointsBet US.
The proposal is valued at $195m (£153m/€178.5m) and DraftKings aims to enhance its sportsbook offering through PointsBet’s trading capabilities and its own points betting product.
The DraftKings’ move sparked an angry reaction from Fanatics chief executive Michael Rubin, who said the proposal was a “desperate” attempt to slow progress on a deal with PointBet. .
Fanatics Betting and Gaming signed a deal to acquire PointsBet US for $150 million in May.
Perhaps there is more to be gained from this deal. Once Fanatics completes the acquisition, it will have access to 12 states. These include major gaming and gaming centers such as New York, New Jersey, Pennsylvania and Michigan.
However, if PointsBet chooses the DraftKings offer, FBG will have to seek alternative routes to these and other markets.
Potentially ‘good’ bids
Days after the DraftKings proposal was submitted, PointBet said it would engage with the group as the proposal could be “better” than a deal with Fanatics.
However, Pointbet reiterated that the DraftKings proposal does not constitute a binding offer or commitment from the DraftKings.
The group further said it would continue to encourage shareholders to vote in favor of the agreed sale to Fanatics while it considers DraftKings’ proposal. A vote on the contract with Fanatics will take place at the Extraordinary General Meeting on June 30.
PointsBet also referred to allegations that the DraftKings had simply put forward an offer to sabotage the process with Fanatics. The group said it believed the DraftKings acted “in good faith” when submitting their proposal.
“Hell or high water?”
In a letter to DraftKings CEO Jason Robbins, PointBet non-executive chairman Brett Payton expressed certain expectations about the proposal. Payton said PointBet will conduct due diligence and asked Draft King to do the same.
Payton said the point bet needs to confirm in writing the Draft Kings’ position on funding US cash burn. He added that the deal with FBG will cap PointBet’s cash burn at $21 million as of July 1.
Additionally, Payton said the point bet would keep the Draft Kings to “hell or high water” standards when it comes to antitrust clearance.
PointsBet struggled in Q1
Both proposals came after PointBet confirmed in April that it was in talks with “multiple parties” regarding the sale of its North American division.
The company also announced that it had completed negotiations to sell its previously reported Australian business to a gaming venture backed by News Corp, which owns the Betr brand.
Nonetheless, Pointbet said it is continuing discussions with “other third parties” who have expressed interest in acquiring the business.
This was due to PointsBet recording revenue of A$106.6 million in the first quarter, up 39% year-on-year.
Growth in North America led the increase, with sales growing 103% year-over-year to $49.8 million. PointsBet’s Canadian business also experienced growth during this period. It increased 21% sequentially to $6.1 million.
Nevertheless, the group said it expects an EBITDA loss of $77 million to $82 million in the second half of 2003.
In addition, we expect cash outflows, including player cash movements, to be approximately 30% lower than in the first half of 2023. Due to these pressures, the Group has worked to reduce costs in order to steer the business in a profitable direction.
