PointsBet shareholders have unanimously agreed to a $225m sale of the US assets of the business to Fanatics.
99.16 per cent of PointsBet shareholders approved the deal at the company’s Extraordinary General Meeting held on Friday, giving the go-ahead for the US business sale.
During the meeting, Board Chair Brett Paton noted that following the sale of the US business, PointsBet is expected to be “at or around EBITDA breakeven” with Australian business profitability to offset “expected near-term losses of the Canadian business as the latter builds scale”.
Paton noted that the sale “delivers the most attractive risk-adjusted value outcome for PointsBet Shareholders, compared to the risks and benefits of PointsBet pursuing other potential options including the status quo”.
He later added that while he understands shareholders’ disappointment and frustration about the company’s share price performance, the approval would “facilitate a significant return of capital to PointsBet shareholders while retaining exposure to PointsBet’s leading Australian business, growing Canadian business and world-class technology assets”.
Following the finalisation of the deal, PointsBet shareholders are expected to be paid A$1.39 to A$1.44 per share.
Fanatics had initially entered into a binding agreement to purchase PointsBet US for $150m back in May. However, the company was forced to increase their bid after DraftKings submitted a non-binding indicative proposal for the US assets for $195m.
PointsBet received an improved bid by Fanatics of $225m, an offer 50 per cent higher than the initial offer and one that wasn’t matched by DraftKings before PointsBet’s deadline of the end of the business day on June 27.
The payments for the US business will come in two stages – $175m at the initial completion of the deal and $75m once the deal has been finalised.
PointsBet has also agreed to cap its funding requirement for the US business at $21m until the transaction has been finalised.
A Fanatics spokesperson told SBC Americas following the EGM vote: “We are thrilled that the shareholders of PointsBet Holdings Inc. voted to approve our acquisition of the US businesses of PointsBet. We moved decisively to close the deal and we look forward to working with our friends at PointsBet Holdings Inc to finalise the remaining acquisition details.
“This is a pivotal moment for Fanatics Betting and Gaming that will accelerate our growth in the legal online sports betting, advance deposit wagering and igaming markets in the US. Pending regulatory approvals in the various states in which PointsBet operates, we will have more details to share in the coming weeks on how the acquisition of PointsBet US businesses will bring to life our unique vision for Fanatics Betting and Gaming.”