betr Challenges PointsBet Board Over Accelerated Share Vesting in Takeover Clash

Context of the Takeover Battle

PointsBet Holdings Limited (ASX – PBH) finds itself at the centre of a fierce takeover contest, with two rival bids vying for control. On one side is MIXI Australia Pty Ltd, offering a recommended cash bid, while on the other, betr Entertainment Limited (ASX – BBT) has tabled an unsolicited all-scrip reverse takeover offer. betr already holds a significant 19.6% stake in PointsBet, underscoring the high stakes involved.

The Controversy Over Accelerated Vesting

At the heart of the dispute is the PointsBet board’s decision to accelerate the vesting of performance share rights, resulting in the issuance of over 10.7 million new shares. This move, executed on 25 August 2025, was justified by the board under its Key Employee Equity Plan Rules, citing a likely change of control due to the takeover bids. However, betr contests this rationale, arguing that the board’s determination was neither reasonable nor urgent.

The accelerated vesting effectively diluted the share capital and boosted MIXI’s voting power from 37.86% to 42.38% within two days, a significant jump that betr claims has unfairly tilted the balance of control. According to betr, the newly issued shares were largely accepted into the MIXI Offer immediately, which they argue interferes with a fair and competitive market for PointsBet shares.

Legal Challenge and Requested Remedies

In response, betr has filed an application with the Takeovers Panel seeking interim and final orders. The interim relief requests a halt on any further accelerated vesting of options or performance rights and that the newly issued shares not be counted towards MIXI’s voting power under the Corporations Act. The final orders sought are more drastic, including cancellation of the issued shares, reissuance of the performance rights to original holders, and an undertaking from MIXI to offer withdrawal rights to shareholders who accepted the offer after 24 August.

The Takeovers Panel has yet to decide whether to proceed with the application, and no comment has been made on the merits. Nonetheless, this challenge highlights the complexities and strategic manoeuvring that often accompany high-stakes takeover battles, especially when control hinges on subtle shifts in shareholding percentages.

Implications for Shareholders and the Market

For PointsBet shareholders, the outcome of this dispute could materially affect the value and control dynamics of their investment. The accelerated vesting and subsequent share issuance have already altered the voting landscape, potentially influencing which bid ultimately succeeds. If the Panel sides with betr, it could reset the playing field, possibly delaying or complicating the takeover process.

Meanwhile, MIXI’s willingness to offer withdrawal rights could provide shareholders with greater flexibility, but also signals the contentious nature of the current bid environment. Investors will be watching closely as the Takeovers Panel deliberates, aware that the ruling could set important precedents for how performance rights and board discretion are handled during takeover contests.