The Australian Stock Exchange has notified investors that shares of PointsBet have been placed on a trading halt ahead of a potential announcement of the sale of its US business to either Fanatics or DraftKings.
PointsBet made a request to the ASX earlier this week that trading of its shares is stopped ahead of the vote from shareholders on Friday, who will decide whether to push ahead with the $150m proposal from Fanatics.
The request means that share trading will be enforced until the beginning of day trading on June 28 or when an announcement is made to the market regarding the potential sale.
Writing to Dale Wang, an official from the ASX listing compliance department, PointsBet stated: “PointsBet requests the trading halt to enable it to manage its continuous disclosure obligations in relation to a material transaction.
“PointsBet requests that the trading halt remain in place until the earlier of the time it makes an announcement to the market and the commencement of normal trading on 28 June 2023; and PointsBet is not aware of any reason why the trading halt request should not be granted, nor of any other information necessary to inform the market about the trading halt.”
Whilst an EGM is still going ahead on Friday, in which the board of directors recommends that shareholders approve the $150m proposal from Fanatics, a spanner was thrown into the works when DraftKings bid a 30% premium of $195m.
PointsBet’s board has since entered into dialogue with DraftKings over the non-binding and non-definitive proposal despite Fanatics seemingly having a deal done back in May.
There is no love lost between Fanatics and DraftKings over this deal, with the CEO of the former Michael Rubin labeling its rival’s move as a “desperate move to slow down Fanatics”.
Meanwhile, DraftKings retorted by stating it one bid was “not a defensive deal” adding that “DraftKings is uniquely positioned to submit this superior proposal due to our scale and corresponding ability to generate meaningful synergies”.
It has since emerged that, according to NY Post reporting, DraftKings and Fanatics were in talks over a $48bn 50/50 merger back in 2021, before Rubin allegedly pulled the plug on talks.
With the trading halt now in force, it is expected that PointsBet will make an announcement of its preferred bidder, and the Fanatics proposal shareholder vote is still expected to take place on Friday.
A statement from Wang, on behalf of the ASX read: “The securities of PointsBet Holdings Limited will be placed in trading halt at the request of PBH, pending it releasing an announcement.
“Unless ASX decides otherwise, the securities will remain in a trading halt until the earlier of the commencement of normal trading on Wednesday, 28 June 2023 or when the announcement is released to the market.”
