Tabcorp Contemplates Potential Bid for PointsBet's Australian Assets
PointsBet (OTC: PBTHF) has been regarded as a probable acquisition target, with talks focusing on both its Australian and U.S. operations. Recent rumors suggest that Tabcorp has held initial discussions about acquiring PointsBet's Australian sports betting business. If this is accurate, Tabcorp would join Betr parent NTD Pty Limited and Entain Plc (OTC: GMVHY) as potential suitors for PointsBet's operations in its native land.
An unnamed PointsBet spokesperson, interviewed by the Australian Financial Review, didn't comment on discussions with Tabcorp, but did acknowledge an abundance of third-party interest in the company. PointsBet CEO Sam Swanell noted that the high level of interest demonstrates that they've built a valuable business, providing them with numerous options for future growth.
Rumors surrounding the potential sale of PointsBet date back at least a year, with whispers initially attributing the speculation to chatter that News Corp.-backed Betr was considering bidding for its competitor.
Implications of a Takeover for PointsBet's U.S. Operations
Rumors about the possible sale of PointsBet's Australian business have been persistent, and the same goes for its U.S. division.
Should PointsBet's Australian outfit be acquired, it could increase the possibility of a similar move for the company's U.S. arm. Some domestic buyers may not be interested in acquiring PointsBet outright since they lack international operations and prefer to avoid Australian regulation.
Additionally, if PointsBet's Australian unit is sold before a similar move happens in the U.S., the price a U.S. buyer would pay for just the North American business would likely be more palatable than purchasing the entire company. PointsBet's market capitalization of $271.54 million makes it an attractive target for numerous potential suitors. This figure reflects the entire company, indicating that if broken up in the acquisition process, it would likely become even more affordable.
Suitors in the U.S. are likely drawn to PointsBet due to an attractive price tag, the operator's licenses, and the belief they can increase market share – something the Australian bookmaker has found challenging to achieve in the U.S.
The Future of PointsBet in Australia
At present, it's uncertain who PointsBet is in talks with for a takeover in Australia, or how far along those discussions are. This uncertainty makes predicting the next steps challenging.
However, the aforementioned suitors are credible. Entain, having recently engaged in a buying spree, has expressed that acquisitions will be crucial to its expansion strategy.
This statement comes at a time when rumors are swirling that Entain itself may be an acquisition target this year.
