PointsBet Faces Uncertain Future as Board Rejects Betr’s Scrip Bid in Favor of MIXI

Background and Offer Details

PointsBet Holdings Limited (ASX, PBH) has formally responded to the off-market takeover bid from MIXI Australia Pty Ltd, a wholly owned subsidiary of Japan’s MIXI, Inc. The offer values PointsBet shares at $1.20 cash each, representing a substantial premium over recent trading prices. The company lodged its Target’s Statement with ASIC on 24 July 2025, outlining the rationale behind the Board’s unanimous recommendation that shareholders accept the offer, barring any superior proposal.

The offer follows an earlier, unsuccessful scheme of arrangement proposed by MIXI earlier this year. Despite majority shareholder support then, the scheme failed to reach the 75% approval threshold, largely due to opposition from Betr Entertainment Limited, a competitor holding a 19.6% stake in PointsBet.

Why the Board Supports MIXI’s Offer

PointsBet’s Directors highlight several compelling reasons to accept MIXI’s cash offer. The $1.20 price per share represents a 44.6% premium to the closing price before the initial MIXI scheme announcement and a 40.3% premium to the one-month volume weighted average price. This offer price also exceeds the independent expert’s recent valuation range of $0.96 to $1.11 per share.

The Board points to ongoing challenges faced by PointsBet, including fierce competition in its Canadian operations, which remain unprofitable, and regulatory uncertainties in Australia that could lead to increased taxes and fees. Accepting the offer provides shareholders with immediate cash certainty and an attractive valuation, with an implied enterprise value of $402 million and an EV/EBITDA multiple of 36.6x based on FY25 guidance.

Competing Offer from Betr Entertainment

Betr Entertainment has launched an unsolicited, conditional all-scrip takeover offer for PointsBet shares, proposing 3.81 Betr shares for each PointsBet share. PointsBet’s Board advises shareholders to disregard this offer, citing its conditional nature, uncertain regulatory approvals, and lack of cash certainty. The Board also criticizes Betr’s business model, highlighting its heavy reliance on a volatile VIP customer base and a product mix skewed towards racing rather than the higher-growth sports betting segment.

Furthermore, the Board questions the realism of the synergies claimed by Betr and points to significant integration risks. PointsBet Directors will issue a separate formal response to Betr’s offer in due course.

Offer Conditions and Next Steps

The MIXI Takeover Offer is conditional on MIXI Australia acquiring at least 50.1% of PointsBet shares and obtaining regulatory approvals, including from the Australian Foreign Investment Review Board. The offer period is scheduled to close on 25 August 2025 but may be extended. Shareholders who accept the offer while conditions remain unmet will be bound to sell their shares once conditions are satisfied, with limited rights to withdraw acceptance.

PointsBet Directors who hold shares intend to accept the offer themselves, representing approximately 8% of shares on issue. MIXI Australia has also secured pre-bid acceptance agreements covering over 9% of shares.

Risks and Considerations for Shareholders

The Target’s Statement outlines risks associated with both accepting and rejecting the offer. Accepting may preclude shareholders from benefiting from any future upside or superior proposals. Rejecting the offer risks share price volatility and potential minority shareholder status if MIXI acquires a majority but not full ownership. Tax implications vary by individual circumstances, and shareholders are advised to seek independent advice.

PointsBet’s Directors emphasize that the offer provides a rare opportunity for shareholders to realise value at a premium, especially given the company’s operational challenges and market uncertainties.