Japanese Entertainment giant MIXI has formally submitted another new takeover bid for PointsBet in response to Betr’s latest offer, as PointsBet advises shareholders to “take no action” over the Betr proposal.
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. The stand-out difference with the new offer is that shareholder acceptance requirements are lower.
MIXI’s offer requires the backing of at least 50.1% of PointsBet shareholders, and MIXI has already secured acceptances of 17.18% through shares held by PointsBet directors and pre-bid agreements with Long Short Equity Management and Pictet Asset Management.
Crucially, MIXI’s proposal has also gained certain regulatory approvals. This includes from both the Alcohol and Gaming Commission of Ontario and the Northern Territory Racing and Wagering Commission. As such, it has been able to proceed with its latest bid without the need for repeat approvals.
The PointsBet board has maintained its unanimous recommendation for shareholders to accept the MIXI offer.
In essence, the value of the offer is the same as MIXI’s previous bid, which last month failed to gain the required level of shareholder support. However, as per the terms of a bid implementation deed signed in June, MIXI committed to an off-market takeover should its initial effort fall short.
Initially, the June shareholder vote suggested the original offer had gained enough support, with 95.69% approval. However, the proxy vote left a more mixed result (69.47% approval).
Betr challenged PointsBet over the case, accusing the operator of “impermissibly excluding” its vote against the scheme without reason. Betr holds a 19.9% voting power in PointsBet but said its proxy vote was not included in the final result.
PointsBet said a system error led to the Betr votes being missed and so a recount took place. However, the updated results showed 70.48% of shareholders were in favour of the proposal, with 29.52% against. The scheme resolution was not carried forward.
With shareholder acceptance requirements now agreed at a lower level, this could be the push MIXI needs to get the green light on its updated bid.
Betr continues to do its utmost to disrupt MIXI’s attempts and provide a “superior” offering including $44.9 million of expected annual cost synergies, estimated at $0.67 per PointsBet share if fully realised.
In its latest bid this week, Betr pledged 3.81 of its own shares in exchange for each PointsBet share. It said this on-market offer equates to AU$1.22 per PointsBet share, based on a Betr share price of $0.32
Excluding the estimated synergy costs, the offer is the same as its previous proposal that was rejected by PointsBet.
Cost synergies, coupled with the AU$1.22 per share offer, provides a potential deal value of $1.89 per PointsBet share. This, Betr said, would far exceed the proposal put forward by MIXI.
However, a statement published by PointsBet on Thursday advised shareholders to take no action over the Betr bid until further details are provided.
It said the implied value of the unsolicited, all-share offer is $1.03 per PointsBet share, when calculated using Betr’s 20 trading day market volume weighted average price to 16 July.
PointsBet intends to make its recommendation on the latest Betr proposal clear in the near future. It reiterated its support for the rival MIXI bid.
Betr said it could further increase its offer and will issue an update if needed.
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