DraftKings Looks To Outbid Fanatics For PointsBet Sportsbook M&A
It appears that the Fanatics acquisition of PointsBet‘s U.S. operations is not set in stone. DraftKings has officially offered a bid of $195 million for PointsBet. This proposal outbids the $150 million offer from Fanatics by 30%. This could throw a wrench in Fanatics’ plans to use PointsBet’s market access to expand to other states.
PointsBet’s Australia-based stock plummeted more than 20% in mid-May after the initial news of a potential deal with Fanatics.
Bid Details As DraftKings Looks To Snag PointsBet From Fanatics
This offer from DraftKings would see the popular sportsbook claim the sports betting properties of PointsBet in the states. PointsBet Sportsbook app would likely be converted into DraftKings Sportsbooks in those markets.
“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 U.S. business,” said Jason Robins, DraftKings’ Chief Executive Officer and Co-founder. “We believe DraftKings is uniquely positioned to submit this superior proposal due to our scale and corresponding ability to generate meaningful synergies from the acquisition.”
DraftKings is an established sportsbook entity that is one of the best sports betting sites in most regulated markets. This bid would serve to expand DraftKings as well as stall Fanatics’ expansion. Fanatics aimed to gain market access for New York sports betting through this deal.
It was even reported that Fanatics was targeting a NY launch by NFL season. PointsBet’s shareholders are set to vote on the Fanatics deal on June 30. This bid could sway the vote against Fanatics.
“We expect this transaction to increase our Adjusted EBITDA potential in 2025 and beyond and not impact our expectations of achieving positive Adjusted EBITDA in 2024,” said Jason Park, DraftKings’ Chief Financial Officer. “We are excited about the potential synergies available by acquiring PointsBet’s U.S. business, including offering our customers interesting new bet types and accelerating our roadmap of bringing in-house more of our mobile sports betting technology.”
Will PointsBet Choose DraftKings Over Fanatics?
PointsBet is indeed considering the proposal. The sports betting operator has been aiming to offload its U.S. operation for some time. The company will target the most lucrative deal that benefits the company in the long term.
“The Directors of PointsBet are committed to acting in the best interest of all Shareholders and are considering the DraftKings Proposal alongside its advisers,” said PointsBet in an official statement.
PointsBet plans to confer with the board of directors who will: “Determine whether the DraftKings Proposal could reasonably be expected to lead to a Superior Proposal for the US Business.” This process will entail examining the bid thoroughly and looking for specific benefits in the process.
- All things which go to Shareholder value, including the amount and timing of capita which will be available to be returned to Shareholders as a result of a transaction;
- Whether the DraftKings Proposal can be completed in a timely and certain manner
- Whether the terms (taken as a whole) of the DraftKings Proposal are more favourable to Shareholders than the FBG Transaction.
The proposal does not constitute an official binding offer nor a commitment from DraftKings. This simply initiates negotiations between the parties. There is no definitive agreement between DraftKings and PointsBet at this time.