If DraftKings set out to drive up the price for Fanatics to acquire PointsBet, they succeeded. On Tuesday PointsBet announced Fanatics had upped its offer to $225 million, a 50% bump from the initial $150 million offer. The PointsBet board unanimously recommends shareholders approve the deal at the June 30 vote.
According to a release from PointsBet, the payments will come in two stages. First, there will be a $175 million payment at the initial completion of the deal, including the $50 million in the revised offer, with the remaining $75 million coming once it is finalized.
Early Wednesday morning, DraftKings confirmed via release that the company is no longer seeking to acquire the company.
Now that information about the offer has been disclosed, trading of PointsBet on ATX can resume. Yesterday the company asked the exchange to temporarily halt trading of shares amidst the lack of clarity around the sale of the US arm of the business.
PointsBet had given DraftKings until the end of the business day Tuesday to put in a binding offer, but the company failed to meet the deadline. PointsBet Chairman Brett Paton made it clear to DraftKings that, in order for the company to take the deal seriously, they would need to put forth a commitment to the sale even if regulators did not approve such a merger.
In a recent episode of iGaming Daily, SBC Americas Editor Jessica Welman and SBC Americas Senior Journalist Charlie Horner discussed how DraftKings and Fanatics would benefit from the acquisition:
“The improved proposal delivers PointsBet shareholders a 50% or $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 a significant benefit to our shareholders,” Paton said.
“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.”
Per the release, PointsBet’s board expects capital distribution to amount to around $.95 per share.
Both Fanatics Betting and Gaming and DraftKings declined to comment on this story.