PointsBet Shareholders Approve Sale Of US Biz To Fanatics

PointsBet (OTC: PBTHF) disclosed that investors unanimously approved a $225 million all-cash acquisition proposal for its US operations from Fanatics.

At an Australian company Extraordinary Group Meeting (EGM) today, 99.16% of PointsBet shareholders voted in favor of the takeover bid presented by privately held Fanatics. This bid was revised this week to include an additional 50%, higher than DraftKings’ (NASDAQ: DKNG) original offer of $195 million in cash. Although initially DraftKings made the higher offer, and PointsBet went into talks with them, they never made a formal proposal and Fanatics ultimately upped their bid. Some analysts now suggest that DraftKings’ involvement in the bid may have been an attempt to create difficulties for Fanatics CEO Michael Rubin, due to reported animosity between him and CEO Jason Robins. This is seen as a ‘pivotal moment’ for Fanatics as they move from acquisition to success.

‘Pivotal Moment’ for Fanatics

For an extended period of time, Fanatics has been at the center of speculation regarding consolidation within the sports betting industry, yet no deals had been reached – until now. 2023 has brought about a monumental transaction for Fanatics Betting and Gaming and, pending regulatory approvals in the specific states in which PointsBet operates, will significantly bolster their growth in the legal online sports betting, advance deposit wagering and iGaming markets in the United States. Fanatics intends to share more details in the coming weeks that illustrate how the purchase of PointsBet US businesses will bring their vision for the company to life. According to a statement from the company headquartered in Florida, this is a key moment for Fanatics Betting and Gaming.

The acquisition of PointsBet by Fanatics could prove to be crucial in boosting the latter’s aim of establishing mobile sports betting in twelve states by the commencement of football season. This move also signals the right time for PointsBet to leave the US market, considering that they lag greatly behind FanDuel and DraftKings when it comes to market share. As per Chairman Brett Paton, PointsBet US is among the seven operators in the nation that have a market share above 1%.

Right Time for PointsBet to Depart US

Paton noted that although PointsBet had some success in the US market, the cost of competing against the bigger players made it too expensive, and that the business would not be cashflow-positive in the short term. Therefore, the decision was made to sell the US business in order to hone in on the Australian and Canadian operations and other opportunities. Paton mentioned that PointsBet US was sold at a loss, but did not give details on this, confirming that the selling of the Australian unit is not being considered at the moment.