Betr's takeover proposal by PointsBet is rebuffed once again, as the company instead strengthens its involvement with MIXI.
In a recent statement, the Board of Directors of PointsBet has recommended that shareholders reject the takeover offer from Betr, favouring instead the offer from MIXI. The recommendation comes after a thorough evaluation of both offers, with the Board citing several concerns regarding Betr's business model and takeover bid.
One of the key issues is Betr's VIP-heavy customer base. PointsBet has highlighted that over 50% of Betr's net win in January 2025 came from just 20 customers, a risky and volatile business model. Moreover, Betr's operations are described as "sub-scale" and heavily focused on horse racing, a sector that PointsBet views as unattractive due to the challenges it poses for diversification and market stability.
The Board also expressed concerns about the market volatility and liquidity risks associated with Betr's all-scrip offer. Since the offer leaves PointsBet shareholders exposed to these risks, given the fluctuating nature of share prices, it is considered less secure. In contrast, MIXI's all-cash offer provides a more stable financial alternative.
Furthermore, the Board disputes the valuation of Betr's offer, suggesting that based on Betr's 20-day volume-weighted average price, the offer is worth less than initially stated—approximately AU$1.03 per share instead of AU$1.22.
The long-term sustainability of Betr's business model is also questioned due to its heavy reliance on a small number of high-value customers and its focus on the racing sector. The realizable value of Betr's all-stock bid is expected to be lower due to the low liquidity of Betr's shares on the Australian Stock Exchange.
Despite Betr's persistent attempts to gain a foothold and secure ownership of PointsBet, the company has repeatedly rejected these advances. The Board of Directors considers the Betr bid to be materially inferior to the offer from MIXI and has recommended that shareholders accept the MIXI Takeover Offer.
The MIXI Takeover Offer prices PointsBet shares at AU$1.20, while the Betr takeover bid amounts to 3.81 Betr shares for every PointsBet share. The offer from Betr is a conditional off-market all-scrip takeover.
It is worth noting that shareholders previously voted against Betr's bid, although some of the largest Betr backers were not properly counted. The Board of Directors remains concerned about the lack of a firm commitment in Betr's proposal and issues with its business model.
In conclusion, the Board of Directors of PointsBet has recommended that shareholders accept the MIXI Takeover Offer, citing concerns about Betr's business model, valuation, and lack of a firm commitment to the proposal. The statement released by the Board concludes by recommending that PointsBet shareholders accept the MIXI Takeover Offer.
- The Board of Directors of PointsBet has expressed apprehensions about the volatility and liquidity risks associated with Betr's all-scrip takeover bid, opting instead for MIXI's all-cash offer which provides a more stable financial alternative in the realm of business and banking-and-insurance.
- The long-term sustainability of Betr's business model is questioned due to its heavy reliance on a small number of high-value customers and its focus on the racing sector, raising concerns about diversification and market stability in the fintech industry.
- The Board of Directors of PointsBet rejects Betr's takeover bid, favoring the offer from MIXI, as it considers the Betr bid to be materially inferior, primarily due to issues with its business model, valuation, and lack of a firm commitment in its proposal, all key factors in the industry of investing and finance.
