PointsBet, the Australian-based gaming operator, has informed its investors of its intention to negotiate with DraftKings following the latter’s surprising $195m bid for PointsBet’s US operations. This comes on the heels of a previous $150m bid for PointsBet US by Fanatics.
The DraftKings Proposal
Over the weekend, PointsBet considered DraftKings’ bid, which it believes “could reasonably be expected to lead to a superior proposal.” Thus, the company has resolved to entertain discussions with the Boston-based bidder. DraftKings’ move took many by surprise on Friday, given PointsBet’s pre-existing deal with Fanatics.
Jason Robins, DraftKings’ CEO, defended the bid, stating that it was due to the “attractive valuation” of PointsBet’s US business rather than an attempt to obstruct the Fanatics deal. Robins reiterated, “While we continue to focus on operating more efficiently and driving substantial organic revenue growth in the United States, we will also look to prudently capitalize on compelling opportunities at attractive valuations, as is the case with PointsBet’s US business.”
DraftKings further underscored that the bid is not a defensive tactic but a “great deal with meaningful potential synergies.” A spokesperson clarified, “We believe the 30% premium is a compelling proposal, and want to reiterate that first and foremost we are pursuing this acquisition because it makes sense for DraftKings. It is not a defensive deal.”
Fanatics’ Perspective and PointsBet’s Decision
Despite this development, PointsBet has advised its shareholders to endorse the Fanatics offer at the forthcoming EGM on June 30. Last month, Fanatics agreed to a $150m deal for PointsBet US, which would extend its reach to 14 US states and incorporate Banach technology.
Fanatics declined to comment on the recent events. However, its CEO, Michael Rubin, expressed scepticism last week towards DraftKings’ proposal, suggesting it seems like a desperate move to stall Fanatics and PointsBet’s agreement. He noted, “We are skeptical of the DraftKings proposal which seems like a desperate move to slow down Fanatics and PointsBet from completing the deal.”
With DraftKings’ bid on the table, PointsBet, DraftKings, and Fanatics find themselves in a complex, unfolding narrative. As the EGM approaches, the players involved, along with the rest of the industry, will be watching closely.