Australian-listed betting operator PointsBet has sold its US business to Fanatics Betting and Gaming. 99.16% of PointsBet’s shareholders voted in favour of the deal during the extraordinary general meeting and gave almost unanimous backing for the transaction to go ahead.
Before the voting took place, the PointsBet board had made it clear where it stood regarding the deal by unanimously approving it, instructing shareholders to vote in favour of the Fanatics deal too.
The process of moving to the next stage of the transaction has already started, but the two companies have not set a date by which the deal should be completed.
Fanatics Had to Increase Its Offer Because of a Last-Minute Rival Bid
Fanatics made its initial overture back in May when it offered US$150 million (A$224 million) for PointsBet’s US division. The betting operator accepted that offer, but a last-minute US$195 million (A$291 million) bid from DraftKings meant Fanatics had to up its bid to stay in the game, especially as PointsBet said it would accept the “superior” bid.
So, last week, Fanatics returned with an improved offer of US$225 million (A$336 million). That was too steep for DraftKings, who dropped out of the race, meaning it was up to PointsBet’s shareholders to finalize the deal with the only remaining bidder.
Fanatics Delighted with Shareholder Vote Outcome
Speaking after the PointsBet shareholder vote took place, a Fanatics spokesperson said that the company “moved decisively to close the deal” and was looking forward to finalizing all the details together with PointsBet.
The spokesperson added that the deal was “a pivotal moment” for Fanatics, and it would accelerate the company’s growth in the legal sports betting and iGaming markets where PointsBet operated. Fanatics is now waiting for approvals from regulators in those states.
The company spokesperson said they would come out with more details in the weeks that follow.
PointsBet US Couldn’t Operate at a Sustainable Scale
PointsBet decided to sell its US business despite experiencing growth in the markets it operated. However, according to PointsBet Chairman Brett Paton “continuing to operate the US business” also meant the company would have to raise “significant capital.” The Fanatics deal addressed “that uncertainty.”
Paton noted that PointsBet, as a challenger business, did its best “to get to scale”. The PointsBet chairman added that they were operating in a “high-cost” market and found it challenging to “operate at a sustainable scale.”
PointsBet will still have a presence in North America, as it continues to operate in Canada. After the US sale, some reports say that the company is no longer considering parting with its Australian business.
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