PointsBet announced that an overwhelming majority of its shareholders supported the sale of its US-facing business to the well-known sports merchandise company, Fanatics. Fanatics Betting and Gaming, the company’s sports retail division, filed a proposal for the takeover of PointsBet’s US assets in a deal for some $225.0 million, a significant increase from its initial proposal.
In light of the fresh proposal, some 98% of PointsBet’s shareholders showed approval for the sale of the company’s US business arm. The announcement comes at a time when PointsBet faced difficulties while trying to expand in the competitive US sports betting market.
It was back in 2021 when PointsBet started its US expansion. Brett Paton, PointsBet’s chairman, who was recently cited by The Sydney Morning Herald, spoke about the frustration of the shareholders over the share price of the company since the start of its US-facing expansion and the costs associated with that venture. “Let me say on behalf of your board that we understand your disappointment about the share price performance of our company,” he said, explaining that he and PointsBet’s chief, Sam Swanell, understand their frustration and concern.
“Continuing to operate the US business would require significant capital and further capital raises.“
Brett Paton, chairman at PointsBet
On the other hand, Paton spoke about the ongoing high costs required to continue the US business operation. Speaking about the sale of US assets to Fanatics he pointed out that the “transaction addresses that uncertainty.”
While the aforementioned transaction will offload PointsBet’s US business, the company will remain in control of its Australian and Canadian businesses. Additionally, it will continue to leverage its leading iGaming and sports betting technology that is used within regulated gambling markets in Australia, as well as North America, providing further growth opportunities.
Fanatics Wins a Tough Fight for PointsBet’s US Business
It was last month when Fanatics and PointsBet agreed on a $150 million deal for the latter’s US business. At the time, Fanatics agreed to pay $100 million upon closing of the agreement as well as $50 million in February next year.
But what was thought to be a done deal had an unexpected turn, after the US gaming and betting giant, DraftKings, tabled a new proposal of $195 million for PointsBet’s US-facing business, surpassing the initial $150 million offer by Fanatics.
However, Fanatics wasn’t going to let this happen and responded with an increased bid of $225 million, which was ultimately the successful one. In light of the new bid, DraftKings confirmed earlier this week that it will no longer pursue options for obtaining the US-facing business of PointsBet.