PointsBet rejects Betr’s offer, cites volatile customer base

PointsBet has unanimously turned down the latest takeover offer from Betr Entertainment, instead encouraging its shareholders to back a rival bid from Japanese digital giant MIXI.

The PointsBet Board cited several key shortcomings in the all-share proposal from Betr, including a business model reliant on a volatile and concentrated group of high-rolling VIP customers.

Betr’s latest proposal offered 3.81 Betr shares for every one PointsBet share, which Betr claimed equated to AU$1.22 (£0.59) per share and could potentially reach up to AU$1.89 (£0.92) per share if all estimated cost synergies were realized.

However, PointsBet’s Board found these synergy benefits overstated and pointed to significant risks. It pointd out that ‘Betr has a less valuable and volatile VIP-heavy customer base’ with over 50% of Betr’s net win in January 2025 coming from just 20 customers.

The Board flagged that this lack of customer diversification, in addition to Betr’s heavy skew toward racing products, made the proposal far less attractive in terms of both stability and regulatory compliance.

PointsBet also noted that the value of Betr’s scrip-based offer was materially less certain compared to MIXI’s improved all-cash bid of AU$1.20 (£0.58) per share.

MIXI’s offer, valued at AU$402 million (£195 million), represents a 44.6% premium over PointsBet’s February closing price.

“The Betr offer is highly conditional, lacks cash certainty, and exposes shareholders to a riskier business model,” PointsBet said in its statement.

Unlike Betr’s proposal, which heavily depends on share value fluctuation and anticipated synergies, MIXI’s cash offer gives immediate value and less risk to shareholders.

The Board also flagged integration and operational hurdles in the Betr proposal, including what it described as ‘significant integration and implementation challenges,’ with likely revenue disruption and questionable financial assumptions.

On top of this, a large proportion of the active customer base overlaps between Betr and PointsBet, raising further doubts about potential growth without cannibalising revenues.

PointsBet formally opened the MIXI takeover offer to shareholders following the rejection of Betr, after Australian regulators gave their consent.

MIXI already holds over 9% of PointsBet’s shares, with the deal advancing to a shareholder vote.

For now, PointsBet’s Board stands firmly behind the MIXI transaction, stating: “The key reason for the difference in value is the calculations underpinning Betr’s value are reliant on a number of assumptions that PointsBet considers to be unrealistic.”