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PointsBet board backs FBG’s enhanced US$225m proposal

Fanatics Betting and Gaming has made an improved proposal to acquire PointsBet’s (ASX:PBH) US business for a headline cash consideration of US$225 million (~A$333 million), representing a 50% increase compared to the previous bid. The PointsBet Board unanimously recommends accepting FBG’s offer, citing the higher price and the certainty of timely completion. The transaction will proceed in two stages, with US$175 million (including the increased cash consideration) to be received initially and US$50 million upon subsequent completion. Shareholders will vote on the FBG Transaction at the Extraordinary General Meeting on June 30, 2023.

The proposed sale of PointsBet’s US Business has been a topic of discussion since May 2023. On June 26, 2023, FBG presented an improved offer of US$225 million, surpassing the previous bid of US$150 million announced in May. The updated proposal has been incorporated into a revised Stock and Equity Sale Agreement between PointsBet and FBG, with changes detailed in Annexure A of the announcement.

With the increased headline cash consideration, the PointsBet Board estimates a distribution of approximately A$1.39 to A$1.44 per share, totaling the Proposed Distribution. The distribution will be made in two tranches following each completion payment, and the process to facilitate the Proposed Distribution will commence in the coming months. The first tranche, expected to be around A$1.00 per share, is scheduled to be paid in mid-September 2023.

PointsBet’s Board reiterates its unanimous recommendation in favour of the FBG Transaction, acknowledging the superior pricing and certainty it offers. Shareholders are encouraged to vote in favour of the transaction at the upcoming Extraordinary General Meeting on June 30, 2023.

PointsBet Chairman Brett Paton expressed his satisfaction with the improved proposal, stating, ““The improved proposal delivers PointsBet shareholders a 50% or US$75 million increase to the acquisition price originally agreed with Fanatics Betting and Gaming. Following the receipt of a non-binding indicative offer for our US Business from DraftKings on 16 June 2023, the PointsBet team entered negotiations with both parties.”

“The Board unanimously supports the improved proposal from Fanatics Betting and Gaming, which provides a superior price plus certainty. Fanatics Betting and Gaming conducted their diligence process and negotiations in a highly professional manner at all times. The offer to “front end” the additional consideration is an element which we regarded as a welcome and significant benefit to our shareholders.”

DraftKings Inc. had previously submitted a non-binding proposal of US$195 million to acquire PointsBet’s US business. However, DraftKings was unable to finalise a binding offer by the deadline of June 27, 2023. As a result, the PointsBet Board determined that the FBG Transaction, with its superior pricing and certainty of timely completion, was the preferable option.

PointsBet is a corporate bookmaker listed on the Australian Stock Exchange, operating in Australia, the United States, Canada, and Ireland. The company provides innovative sports and racing wagering products, as well as advance deposit wagering on racing (ADW) and iGaming services.