PointsBet Sale Takes an Unexpected Turn

It was thought that the U.S. assets of PointsBet would be sold to Fanatics, but DraftKings has made a late bid and now everything is up in the air regarding the proposed sale. In a statement, the PointsBet board of directors said it had considered the DraftKings proposal and, acting in good faith, had decided (after consulting with the company’s financial and legal advisors) that the DraftKings Proposal could reasonably be expected to lead to a Superior Proposal.

PointsBet has said that they will now work with DraftKings on its offer to buy the firm’s U.S. assets for $195 million, with the help of its financial and legal consultants. Voting by shareholders is scheduled for June 30. The board stated that, as it evaluates the DraftKings offer, it continues to recommend that shareholders approve Fanatics’ $150 million offer to buy the business’ U.S. assets.

On June 15, DraftKings Inc. made a higher offer of $195 million in cash to purchase PointsBet’s U.S. assets than Fanatics’ first offer of $150 million. The purchase was still subject to shareholder approval at the shareholder meeting on June 30, even if the PointsBet board had approved a sale to Fanatics. DraftKings sent a letter outlining an offer to purchase PointsBet’s U.S. assets to both Brett Paton, non-executive chairman, and Sam Swanell, chief executive officer. Jason Robins, the chief executive officer of DraftKings, calls his company’s offer a “better offering” that offers a “substantial premium” over the Fanatics’ price in the letter.

If Fanatics is not able to get PointsBet, it would delay their entrance into many states. In 14 states, including New York, New Jersey, Michigan, and Pennsylvania, PointsBet has access to the domestic market. Without the acquisition, Fanatics Sportsbook is unlikely to be allowed to enter the sports betting markets in New York, Michigan, and possibly New Jersey. Currently, Fanatics is conducting business in Massachusetts, Maryland, Ohio, and Tennessee.

Michael Rubin, the CEO of Fanatics, told CNBC that he has doubts about the rumored DraftKings offer to buy the business. “It’s an attempt to prevent us from entering the market”, said Rubin. “They must care more about us than I had anticipated, I suppose.”

Robins received a letter from Paton, PointsBet’s non-executive chairman, describing the business’s upcoming actions in relation to the filed offers. The interest in the offer was confirmed by Paton, who also stated that the board was “willing to speak with DraftKings.”

PointsBet formally demanded that DraftKings conduct any due diligence with a “clean crew.” “This will necessitate the adoption of a clean team protocol before the start of the due diligence. We advise DraftKings to provide a clear team policy that is most effective for your team in the interest of time, Paton wrote. Paton stated that the due diligence procedure must be finished by Tuesday, June 27.