Betr issues vote ‘blocking’ warning after upping PointsBet holding

Betr Entertainment has increased its total holding in PointsBet to 27.72%, saying the larger stake will grant it additional voting powers to “block” actions that it deems to be against the interests of shareholders.

The enlarged holding is the result of an off-market takeover bid for all ordinary shares in the PointsBet business. This offer closed on 25 September, with Betr now holding an additional 30,341,074 shares in PointsBet.

Betr had hoped for a full takeover, or at least a majority holding, having gone toe-to-toe with MIXI Australia for control of the operator. MIXI ultimately came out on top, but the 66.43% it secured from its own takeover offer means it will still face scrutiny from other shareholders on business decisions.

Betr previously held a 19.9% stake in PointsBet. However, with its takeover bid having upped this holding to more than a quarter of all shares, Betr will have a major say in shareholder votes.

“This stake will be large enough to block actions that run against shareholder interests and drive constructive engagement with MIXI and the PointsBet board on value creation,” Betr said.

Betr opposition to MIXI meant lower payout for shareholders

Incidentally, Betr’s proposal — on paper — was valued higher than the successful offer from MIXI. Betr submitted an all-share bid worth $1.40 per share, but this was not enough to sway PointsBet, which is now comfortably majority-owned by MIXI.

Based on the offer consideration ratio of 4.375 Betr shares for each PointsBet share, Betr will issue approximately 133 million new shares to the PointsBet shareholders who accepted its offer.

PointsBet sided with MIXI throughout the saga. Its board constantly rebuffed Betr’s proposals and urged shareholders to back MIXI’s offers. However, Betr’s persistence led to MIXI having to increase its offer on several occasions.

In February this year, PointsBet’s board approved an initial proposal from MIXI. This would have seen it pay $1.06 in cash per share for a 100% holding in the operator. However, the final offer, put forward in August, eventually valued PointsBet at $1.25 in cash per share.

This could have been even higher if more shareholders had backed the offer. MIXI pledged to pay $1.30 per share, in cash, if it secured more than 90% of the total holding in PointsBet. Betr remained steadfast in its opposition, however, and refused to vote in favour of the MIXI bid, which meant the $1.25 per share price was set.

Ultimately, while Betr’s opposition reduced the overall takeover cost for MIXI, its persistence with its own offer means MIXI could run into trouble when trying to pass proposals that Betr does not necessarily agree with.