A penny for the thoughts of PointsBet Group CEO Sam Swanell right now, or perhaps many millions of pennies...
Indeed, after Swanell told the GI Huddle of his delight at previously agreeing a $150m deal to sell PointsBet's US operations to Fanatics, the PointsBet Board has unanimously recommended accepting a $225m offer from the same company.
How did PointsBet receive $75m more for the exact same assets? After DraftKings came in with a late bid, Fanatics decided to up its offer rather than bowing out to DraftKings' 'superior offering' of $195m.
Speculation was rife as to whether Fanatics would submit another competing bid, as we also discussed in last week's GI Friday, and Fanatics has duly responded.
Given the heavy interest from both parties, we could now be looking at a pivotal moment in the history of the fledgling US sports betting market.
Fanatics clearly feels PointsBet's US division is worth fighting for (PointsBet would keep its Canadian and Australian businesses under the proposed deal), and all that remains to be seen is whether DraftKings keeps the bidding war going.
However, DraftKings has officially "announced that the company is no longer pursuing the acquisition of the US business of PointsBet. The company thanks PointsBet for their time and access over recent weeks."
The Board unanimously supports the improved proposal from Fanatics Betting and Gaming, which provides a superior price plus certainty
PointsBet Chairman Brett Paton commented on the deal: “The improved proposal delivers PointsBet shareholders a 50% or $75m 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 that we regarded as a welcome and significant benefit to our shareholders.
"Subject to shareholder and regulatory approvals, our US team will have a strong future as part of the Fanatics Betting and Gaming group, and PointsBet will build on the opportunities in Australia and Canada underpinned by a strong balance sheet.”
