Pointsbet Requests Trading Halt Speculating a Takeover

Ben H 28 June 2023 Last Updated: 28/06/23

Pointsbet has asked for an immediate trading halt ahead of a company announcement. That means share prices of the sports betting operator on the ASX won’t be going up or down.

Pointsbet requested the immediate trading halt because it was preparing a market announcement regarding a “material transaction.” We can only guess what that material transaction involves, but going by recent reports, it could very well be something big, not excluding a potential takeover.

DraftKings and Fanatics Make Bids for US Business

There has been a lot of interest in Pointsbet’s Australian and American businesses. The New York Post reported that Pointsbet has already received a couple of bids for its US operations, one from DraftKings ($291 million) and the other from Fanatics ($224 million).

The report in the New York Post claims that there’s a rift between DraftKings boss Jason Robins and Fanatics CEO Michael Rubin. Robins is reportedly unhappy that Rubin decided to walk away from a fifty/fifty merger between the two companies in 2021, while negotiations were in the advanced stages.

Back then both betting operators were valued at about $35 billion, so the total value of the merger would have been $70 billion. After the deal collapsed, DraftKings shares plummeted too. So, Robins would have every right to feel disappointed.

However, the company said there was “no ulterior motive” neither “personal” nor “business-related” and DraftKings didn’t try to usurp Fanatics’ bid for the US arm of Pointsbet. DraftKings called those claims “irresponsible and not grounded in reality.”

Australian Business Could Be for Sale Too

Pointsbet’s Australian business has also attracted interest. The company used to talk about the possibility of selling its Australian wagering division.

However, Pointsbet now seems focused on fetching as much money as possible from its US operations. So, it has not spoken, at least not publically, about selling its Australian business.

That said, the trading halt could have very well been requested because someone made a bid for Pointsbet Australia and not the US business.

It will all be much clearer on Wednesday when Pointsbet releases the announcement.

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Ben H

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