PointsBet Responds To DraftKings' Takeover OfferMeeting On Potential Deal Scheduled Later This Month |
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PointsBet Holdings announced that it is considering a rival acquisition offer from DraftKings that followed a similar offer from Fanatics.
DraftKings offered $195 million in an effort to outbid an earlier $150 million from Fanatics Betting and Gaming (FBG). Fanatics doesn’t currently operate an online sportsbook, and the acquisition for PointsBet is designed to accelerate its online betting product.
According to the announcement, the directors of PointsBet have determined, after consultation with the company’s financial and legal advisers, that the DraftKings proposal “could reasonably be expected to lead to a superior” offer for the U.S. business.
PointsBet said it will now engage with DraftKings.
“As previously advised, it should be noted that the DraftKings proposal does not constitute a binding offer or commitment on the part of DraftKings to negotiate or execute a definitive agreement and, to this end, there is no guarantee that the DraftKings proposal will result in a binding definitive agreement,” PointsBet said.
PointsBet said there will be a meeting on June 30 to discuss the offer.
PointsBet is a corporate bookmaker listed on the Australian Stock Exchange with operations in Australia, the United States, Canada and Ireland. The firm is looking to sell its U.S. business.
The company has requested more information from DraftKings on its plan to acquire PointsBet with cash.
“Additionally, as discussed with you verbally, the [PointsBet] Board requires a written confirmation, as soon as practicable, of DraftKings’ position on funding the cash burn of the U.S. Business (noting that the FBG transaction caps PointsBet’s cash burn at $21 million from July 1 2023),” the firm said.
The deal could run into antitrust roadblocks, as DraftKings is one of the largest players in the U.S. online sports betting industry. FanDuel Sportsbook and BetMGM Sportsbook are its top rivals.
“In light of the anticipated heightened scrutiny of an acquisition of PointsBet by DraftKings, as compared to the FBG transaction, please provide written confirmation that DraftKings will assume the risk of delay and/or denial of antitrust approvals,” PointsBet said.
Fanatics CEO Michael Rubin criticized the DraftKings offer.
“We are skeptical of the DraftKings proposal which seems like a desperate move to slow down Fanatics and PointsBet from completing the deal as the purchase price and other financial commitments will total more than $500 million – so they are using the majority of their projected year-end cash just to try to block us,” Rubin said in a statement.
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