PointsBet slams BlueBet’s A$360m acquisition bid as “unfunded”
Australian operator says lack of details and extended timelines associated with offer mean MIXI’s A$353m proposal provides greater shareholder value
PointsBet has described BlueBet’s bid for the Australia-headquartered operator as “unfunded” and said it would not provide a superior return to shareholders compared to MIXI’s A$353m (£176.5m) offer.
The response, which has been authorised by the PointsBet board, comes after BlueBet submitted a rival cash-plus-scrip offer worth between A$340m and A$360m.
The bid was revealed after Japanese firm MIXI had agreed a scheme implementation deal with PointsBet worth A$1.06 a share.
PointsBet’s board has already given its backing to the MIXI offer, and has now publicly denounced BlueBet’s proposal.
In the letter, PointsBet said BlueBet’s “highly conditional” offer would have valued the company at between A$1.02 and A$1.09 per share.
The operator added it had sought advice from financial and legal advisers and, in turn, ruled the BlueBet bid could “not reasonably be expected to lead to a superior proposal” than MIXI’s.
PointsBet said there were several factors that had led the board to such a conclusion, before detailing three key points in its public release.
Firstly, PointsBet claims the BlueBet offer is “unfunded” and that the level of debt and capital raising required by BlueBet were of concern.
The letter read: “The proposal was unfunded, subject to an explicit financing condition, and would require BlueBet to both raise A$100m in debt and undertake a large upfront capital raising (A$160m), the terms of which were uncertain and could materially affect the value ultimately received by PointsBet shareholders.”
Additionally, PointsBet said any value creation from a BlueBet acquisition was “heavily dependent on assumed synergies, with no details (or disclosed consideration of any dis-synergies) provided”.
Finally, the board said BlueBet is seeking a “significant amount of time” to undertake due diligence. BlueBet’s offer requested 25 business days to complete the process.
BlueBet had claimed to have the support of key PointsBet investors in the shape of Wilson Asset Management and Pendal.
PointsBet shareholders will vote on the MIXI proposal in May.
BlueBet, which runs the betr brand in Australia, slid 2.7% today to A$0.36 on the ASX in Sydney.
In contrast, PointsBet’s shares have leapt by almost a quarter since the disclosure of the MIXI offer, closing out today at A$1.11.