Hard Rock Digital Enters Negotiation with Betr, Offering AU$30m for Betr's Canadian Division
In a twist of events, online gambling operator PointsBet may have a new suitor β Betr Entertainment β as the company attempts to muscle out a potential bidding war with MIXI, the Australian subsidiary of Japanese digital entertainment firm.
Now, Betr boasts a 20% stake in PointsBet, making it the prime shareholder. In a bold move, Betr aims to gobble up the remainder of PointsBet's outstanding stock, securing complete control. The total value of this takeover, including AU$260 million in cold hard cash, amounts to an impressive AU$360 million (US$230 million) on paper.
This offer far surpasses MIXI's initial bid of AU$352 million (US$225 million). Betr plans to battle MIXI tooth and nail, using all its shares to nix MIXI's proposal.
Merging with PointsBet would create immense scale in the Australian market, unlocking significant synergy opportunitiesβa claim Betr, having merged with BlueBet last year, stands by firmly.
Initially, PointsBet was less than impressed with Betr's first offer, outlining concerns to shareholders in a letter in early April. These doubts centered around Betr's financing abilities, leading PointsBet to veer towards MIXI's bid.
However, things have taken a drastic turn since. PointsBet has locked in a AU$120 million (US$77 million) financing facility with the National Australia Bank, and Seminole Hard Rock Digital, operator of Hard Rock Bet in eight US states, has extended an offer worth AU$30 million (US$19 million) to buy PointsBet's Canadian business. Interestingly, while PointsBet sold its US assets to Fanatics for US$225 million back in 2024, it kept a foothold in Ontario.
Behind the Scenes:
- Synergy Goldmine: Betr anticipates annual synergies exceeding AU$40 million, potentially generating AU$1.33 per share value for PointsBet shareholders.
- Money Matters: Betr is poised to secure AU$130 million in equity raising to finance the acquisition.
- Market Clout: If successful, Betr aims to become the fourth-largest wagering operator in Australia, eyeing a combatitive 10-15% market share.
The Great Debate:
- Power Play: As PointsBet's largest shareholder, Betr intends to vote against MIXI's proposal, complicating MIXI's path forward.
- Value Battle: Betr's revised bid promises greater synergy realization and enhanced funding security compared to MIXI's undisclosed terms. PointsBet's board initially backed MIXI but now faces pressure to reconsider due to Betr's improved financial terms and Seminole Hard Rock Digital's involvement. The final decision rests with PointsBet's board, which must now weigh the benefits of each offer.
Betr's revised bid of AU$360 million (US$230 million), consisting of AU$260 million in cash and AU$100 million in equity, is now more appealing to PointsBet, surpassing MIXI's initial offer of AU$352 million (US$225 million). The acquisition, if successful, would give Betr a substantial 40% annual synergy value, potentially raising AU$1.33 per share for PointsBet shareholders. Despite initial reservations about Betr's financing abilities, the company has secured a AU$120 million (US$77 million) financing facility with the National Australia Bank and an AU$30 million (US$19 million) offer from Seminole Hard Rock Digital for PointsBet's Canadian business, making Betr's offer more competitive.
