The potential sale involving DraftKings, Fanatics, and PointsBet has taken a new twist as the board of directors at PointsBet has assessed DraftKings’ proposal and believes it could result in an offer.
PointsBet’s board provided an update on the potential sale of the company’s U.S. assets, stating that they have thoroughly reviewed DraftKings’ proposal and, in good faith, have determined that it has the potential to be a worthy proposition.
With the guidance of financial and legal advisors, PointsBet has announced its intention to engage with DraftKings regarding its proposal to acquire the company’s U.S. assets for $195 million.
The board has also announced that while considering the DraftKings offer, they still recommend that shareholders vote in favor of Fanatics’ proposal, which offers $150 million to purchase PointsBet’s U.S. assets. The shareholder vote is scheduled for June 30.
DraftKings made a cash bid of $195 million to acquire PointsBet’s U.S. assets on June 15, surpassing Fanatics’ earlier offer of $150 million. DraftKings’ proposal represents a 30% increase compared to Fanatics’ bid. Despite the PointsBet board previously agreeing to the sale to Fanatics, the acquisition is contingent upon the outcome of the June 30 shareholder meeting.
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A letter from DraftKings’ CEO, Jason Robins, was delivered to Brett Paton, the non-executive chairman, and Sam Swanell, the CEO of PointsBet, expressing their offer to purchase the company’s U.S. assets. Robins described DraftKings’ bid as a “superior proposal” that provides a substantial premium compared to Fanatics’ proposal.
If Fanatics loses the bidding war, it will encounter delays in accessing several states for its sports betting operations. PointsBet currently has market access in 14 states, including New York, New Jersey, Michigan, and Pennsylvania.
Without the purchase of PointsBet, Fanatics Sportsbook may face challenges entering the Michigan and New York sports betting markets, and it could encounter difficulties in entering New Jersey as well. On the other hand, Fanatics currently holds licenses to operate in Massachusetts, Maryland, Ohio, and Tennessee.
Fanatics’ CEO, Michael Rubin, expressed skepticism about DraftKings’ bid, suggesting that it is an attempt to impede their market entry. Rubin stated, “It’s a move to delay our ability to enter the market. I guess they are more concerned about us than I would have thought.”
Brett Paton, the non-executive chairman of PointsBet, sent a letter to Jason Robins today outlining the company’s upcoming steps regarding the submitted bids. Paton confirmed their interest in the bid and expressed the board’s willingness to engage with DraftKings.
PointsBet has formally requested that any due diligence conducted by DraftKings be carried out by an unbiased “clean team.” Paton suggested that DraftKings provide a clean team protocol that best suits their requirements to expedite the process. The due diligence process is expected to conclude no later than 6 p.m. on Tuesday, June 27, Melbourne time, as stated by Paton.
