Selective Buy-Back Could Shift betr Shareholder Control Amid PointsBet Takeover

Context of the Offer

On 8 August 2025, betr Entertainment Limited (ASX, BBT) issued a Supplementary Explanatory Memorandum updating shareholders on its ongoing takeover bid for PointsBet Holdings Limited (ASX, PBH). The key update is an increase in the offer consideration ratio from 3.81 to 4.219 betr shares for each PointsBet share, reflecting a more aggressive bid to secure full ownership.

This all-scrip offer means PointsBet shareholders who accept will receive more betr shares than initially proposed, with the updated ratio translating to an implied value of approximately $1.29 to $1.35 per PointsBet share depending on various betr share price benchmarks. This move signals betr’s commitment to the acquisition and aims to enhance the attractiveness of the offer.

Selective Buy-Back Proposal and Financial Implications

Alongside the offer update, betr is seeking shareholder approval for a selective buy-back of its own shares, with two potential limits, $80 million or $200 million. The buy-back is designed to manage the capital structure post-acquisition, potentially reducing the number of shares on issue and thus increasing the voting power of existing shareholders.

Pro forma balance sheets included in the memorandum illustrate the financial position of the combined entity after the offer and selective buy-back, assuming successful completion. These show adjustments for betr’s recent $130 million capital raising, the acquisition of a pre-bid stake in PointsBet, and the impact of the buy-back funded partly through cash reserves and amended debt facilities.

Voting Power and Control Dynamics

The document provides detailed scenarios on how voting power will shift between existing betr shareholders and PointsBet shareholders following the offer and buy-back. Notably, the buy-back could increase existing shareholders’ voting power from 47% up to as much as 66% under the $200 million buy-back limit with full uptake, depending on the final share count post-offer.

However, the memorandum clarifies that no existing shareholder’s voting power will exceed their post-offer level solely due to the buy-back, maintaining a balance of control. This nuanced approach aims to reassure shareholders about governance and influence in the combined business.

Board Endorsement and Next Steps

The betr Board has unanimously recommended that shareholders vote in favor of the selective buy-back resolution, emphasizing that it will not materially prejudice the company’s ability to meet its creditor obligations. Directors intend to vote their shares in support of the resolution, signaling strong internal confidence.

Shareholders are encouraged to review the supplementary memorandum alongside the original explanatory materials and to submit proxies ahead of the online Extraordinary General Meeting scheduled for 25 August 2025. The outcome will be pivotal in shaping betr’s capital structure and the success of the PointsBet acquisition.