PointsBet Reportedly Rebuffed Murdoch-led Group Bid for Aussie Business

Posted on: June 12, 2022, 07:51h. 

Last updated on: June 13, 2022, 12:21h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

PointsBet (OTC:PBTHF) reportedly turned back an acquisition offer for its Australian unit valued at up to $211.1 million. The bid came from a group led by Rupert Murdoch’s News Corp and legendary Aussie bookmaker Matthew Tripp.

PointsBet
PointsBet advertising at the Pepsi Center in Denver. The company reportedly rejected an acquisition offer for its Australian unit. (Image: The Business Journals)

Citing unidentified sources familiar with the situation, The Sydney Morning Herald  reports the News Corp/Tripp consortium approached PointsBet’s board two weeks ago. They came up with an offer for the Australian business ranging from about $155 million to $211.1 million. PointsBet directors did not take the offer to investors, according to the newspaper.

It’s believed Las Vegas-based Tekkorp Capital, which invests in public and private companies with exposure to the esports and gaming industries, was also part of the group that approached PointsBet.

In the US, Tekkorp is involved with Tekkorp Digital Acquisition (NASDAQ:TEKK), a special purpose acquisition company (SPAC) still hunting for a merger partner.

Murdoch/Tripp Bid May Have Been too Low

PointsBet’s market capitalization is $425.91 million as of the June 11 close, indicating it’s possible the News Corp bid was too low to compel the board to bring the offer to shareholders.

Additionally, the sportsbook operator has $334.35 million in cash, and as the Morning Herald reports, the operator expects its Australian arm will be positive on the basis of earnings before interest, taxes, depreciation and amortization (EBITDA) this year.

News Corp has long signaled ambitions to bolster its sports wagering footprint in Australia — its home country — and, along with Tripp, has been tied to previous consolidation rumors. The move on PointsBet’s Australia unit could have been prompted by the gaming company’s well-known intent to focus on the North American market.

The operator is currently live in Ontario, Canada and 10 states, including lucrative New York. By the end of 2022, PointsBet is aiming to be operational in at least 19 North American states and provinces and aiming for 10% share in those jurisdictions.

PointsBet Takeover Rumors Persist

This isn’t the first time the Australia-based gaming company is the center of takeover speculation. Early this year, reports surfaced that Fanatics previously courted PointsBet before opting against a deal.

Owing to its market cap, cash on hand and impressive North American portfolio, PointsBet makes for an attractive acquisition target for gaming companies looking to move into sports wagering, or established players looking to add market share via acquisition.

A potential beneficiary of a PointsBet takeover, assuming such a transaction comes to fruition, is Penn National Gaming (NASDAQ:PENN). The regional casino operator’s Penn Interactive Ventures (PIV) unit purchased 6.27% of PointBet’s voting stock last September.