PointsBet has received two competing takeover offers, with its board unanimously backing an AU$353 million all-cash bid from Japanese digital entertainment company Mixi. Meanwhile, Australian-based bookmaker BlueBet has proposed an alternative deal, valued between AU$340 million and AU$360 million, that includes both cash and a scrip component.

The Mixi offer, presented through its Australian subsidiary, includes AU$1.06 per share in cash—a 27.7% premium over PointsBet’s stock price before the offer. The board highlighted that the deal provides “immediate and certain cash value at a premium to recent trading prices” and aligns with sector trading multiples.

However, BlueBet’s proposal, initially made on February 18 and formalized last week, consists of a cash pool between AU$ 240 million and AU $260 million, alongside AU$100 million to AU$ 120 million in scrip consideration. BlueBet argues that its offer could yield AU $40 million in synergies, making it more beneficial in the long run.

Major Shareholders Express Doubts Over Mixi Deal

While PointsBet’s board has recommended the Mixi offer, key investors, including Wilson Asset Management and Pendal, lean toward BlueBet’s bid.

“The key attraction of the BlueBet proposal is the option to roll script into the merged entity as we believe there is significant future upside,” said Shaun Weick of Wilson Asset Management according to Australian Financial Review. “Bowing out and accepting Mixi’s bid would leave a lot of upside on the table. We think the Mixi bid is truly undervaluing the business. We will vote against the Mixi deal.”

Similarly, Pendal’s Damien Diamant labeled BlueBet’s offer as “superior,” citing the value of scale and cost synergies. Both investment firms also hold stakes in BlueBet, which strengthens their position in advocating for the rival offer.

Despite these objections, PointsBet CEO Sam Swanell maintained that Mixi’s offer is competitive. “The price appropriately reflects the value of PointsBet’s world-class technology assets and reputation for wagering excellence in both Australia and Canada,” he stated.

BlueBet Highlights Strategic Benefits of Its Offer

BlueBet, which recently acquired Betr and is in the process of taking over Australian sportsbook TopSport, argues that its bid offers compelling financial and strategic benefits. In a letter to PointsBet’s leadership, BlueBet Chairman Matt Tripp and CEO Andrew Menz emphasized that their offer would provide shareholders with a stronger growth path compared to the Mixi bid.

“Our proposal offers compelling strategic and financial benefits for PointsBet shareholders,” they wrote. “The transaction offers Betr immediate additional scale, access to important technology assets, and key marketing contracts, all of which will accelerate our growth ambitions.”

BlueBet has secured equity funding from Jarden, Morgans, and Ord Minnett and expects to complete due diligence within 20 business days.

Industry Consolidation and Market Impact

The fight for PointsBet comes at a time when Australia’s wagering industry is undergoing consolidation, with increasing regulatory restrictions, economic uncertainty, and competition from global giants like Sportsbet.

Mixi, which owns betM in Australia, sees the acquisition as a gateway to expand its sports betting operations beyond Japan, where its social betting platform TIPSTAR has seen profitability. The company noted that Australia’s betting market is particularly attractive due to its established culture of gambling.

BlueBet, on the other hand, believes that a combination with PointsBet would create a larger, more competitive Australian operator capable of taking on international rivals. Notably, more than 20% of PointsBet shareholders have reportedly expressed a preference for a deal that includes scrip rather than an all-cash exit.

Financial Performance and Share Price Reactions

PointsBet recently reported a 5.8% rise in revenue to AU$124.4 million for the six months ending December 31, 2024. Australian operations contributed AU$106.2 million, while Canadian revenue grew 14.5% to AU$18.2 million. The company’s net loss was reduced to AU$17.4 million from AU$37 million the previous year, reflecting a significant improvement in financial performance.

Following news of the Mixi takeover bid, PointsBet’s stock surged 32.53% to AU$1.10. Over the past six months, its share price has increased by 120%.

What Comes Next?

PointsBet shareholders will vote on the Mixi deal at a special Scheme Meeting scheduled for May 2025. If approved, the acquisition is expected to be completed by mid-June.

While the board stands behind Mixi’s offer, the final decision rests with shareholders. With key investors favoring BlueBet’s bid and ongoing discussions around strategic growth, the future of PointsBet remains uncertain as the competing suitors continue to make their case. The company sold its U.S. operations to Fanatics in 2024.