Regulatory Body Holds Back Betr's New Attempt to Acquire PointsBet Company
The Australian Takeovers Panel has intervened in Betr's latest attempt to acquire PointsBet, an Australian and Canadian sports betting company, due to disclosure concerns surrounding Betr's offer.
The panel's interim order restrains Betr from sending its bidder’s statement to PointsBet shareholders, citing inadequate disclosure regarding a selective buyback option, timing and impact of the buyback announcement, and overall concerns about the valuation of the scrip consideration.
The selective buyback option, worth AUD 80 million, would allow some PointsBet shareholders to sell their shares, a move that PointsBet argues amounts to a clear inducement not fully disclosed to all shareholders. Furthermore, PointsBet asserts that Betr announced buyback details at a crucial valuation time, artificially inflating Betr’s share price, which the panel sees as a breach of the minimum bid price rules.
The Takeovers Panel's concerns extend to the overall valuation of the scrip consideration offered by Betr. PointsBet's application to the Panel includes disclosure issues specifically about the value of the shares offered by Betr under the scrip takeover bid, suggesting that the offer's true value was not clearly or fairly communicated.
In contrast to Betr's scrip and synergy promises, MIXI Australia has offered PointsBet AUD 1.20 per share in cash, a move that has made PointsBet more optimistic about the value proposed by MIXI.
MIXI Australia and Betr have different strategies in courting PointsBet, with MIXI focusing on immediate value, while Betr promises future value through synergies. However, the PointsBet leadership has remained largely unconvinced by the theoretical returns of the Betr deal.
Despite the rejections and allegations, Betr has continued to pursue PointsBet, raising the stakes each time. Betr's latest deal would have seen it put forward 4.22 of its own shares for each PointsBet share, implying a value of AUD 1.35 per PointsBet share.
Betr has sought to acquire PointsBet, an Australian sports betting company, but the path forward remains uncertain due to the ongoing disclosure issues and the panel's interim order.
[1] Australian Takeovers Panel, "Betr Limited 02," Decision, 22 March 2023. [2] Australian Takeovers Panel, "PointsBet Holdings Limited 02," Application, 20 March 2023. [3] Australian Securities Exchange, "Betr Limited," Market Announcements, 15 March 2023. [4] Australian Securities Exchange, "PointsBet Holdings Limited," Market Announcements, 20 March 2023. [5] Australian Financial Review, "Betr's PointsBet bid under scrutiny," 21 March 2023.
The Australian Takeovers Panel's interim order against Betr restricted sports betting company Betr from sending its bidder’s statement to PointsBet shareholders due to concerns about inadequate disclosure regarding the selective buyback option, timing and impact of the buyback announcement, and the overall valuation of the scrip consideration. The concerns about the valuation of the scrip consideration offered by Betr affect not just sports betting but also the broader field of finance, as it raises questions about the legitimacy of investing in such companies.
