Betr's January earnings allegedly owed to a small fraction of clients by a competing gambling company's assertion.
In a fierce battle for control, Australian gambling firm PointsBet has rejected a takeover bid from its rival Betr, favouring a competing cash offer worth AU$402 million (US$266 million) from Japanese company MIXI instead.
Betr's proposed scrip-based offer, which would see PointsBet shareholders receive 3.81 Betr shares for each PointsBet share, has been deemed "highly conditional" by PointsBet, with concerns about its complexity and volatility.
PointsBet's board has raised serious concerns about Betr's business model, particularly its heavy dependence on a very small group of VIP players. Over half of Betr's profits in January 2025 were generated by just 20 customers, increasing regulatory and compliance risks and revenue volatility.
MIXI's all-cash bid, on the other hand, offers more certainty and immediate value to shareholders. MIXI has already secured Australian Foreign Investment Review Board approval and pre-bid agreements with institutional shareholders, totaling over 17% combined with directors' shares, strengthening its position for takeover.
The discussions between PointsBet and Betr have included due diligence, with PointsBet securing access to Betr's financials and operations as part of the negotiations. However, the board has consistently supported MIXI's straightforward and stable cash offer over Betr's conditional, volatile scrip deal.
This takeover battle highlights competition and consolidation trends in Australian online sports betting. The decision on the takeover bid is now in the hands of PointsBet's shareholders, who must approve at least 50.1% of the votes for the bid to be successful.
The MIXI offer is valid until August 25, 2025, and Betr has submitted renewed bids in an attempt to intensify the competition. Despite the overlap in customers, there is a significant difference between the two sports betting platforms, with Betr showing a significant skew towards racing.
As the battle continues, the future of both companies hangs in the balance, with the potential change in ownership of Betr having significant implications for the Australian online sports betting market.
Given the ongoing competition in the Australian online sports betting market, PointsBet's board found Betr's scrip-based offer conditional and potentially volatile, raising doubts about its suitability for the company. Instead, the board preferred MIXI's all-cash bid, due to its certainty and immediate value to PointsBet's shareholders, as it originated from a stable and established player in the finance and business sectors, with a strong presence also in the casino-and-gambling industry.
