PointsBet’s battle for control intensifies as its shareholders narrowly approved a takeover deal with Japanese firm MIXI, but not without a significant challenge from rival bidder Betr Entertainment. Despite the seemingly overwhelming support for MIXI’s AU$1.20-per-share offer, Betr claims that its votes were improperly excluded, throwing a legal wrench into the approval process. As the dispute continues, the future of PointsBet remains uncertain.

Dispute over exclusion of Betr’s proxy vote:

Betr Entertainment, which holds a 19.9% stake in PointsBet, has accused the company of deliberately excluding its proxy vote against MIXI’s acquisition proposal. Betr claims that the exclusion occurred without explanation, thereby skewing the results of a shareholder vote held on June 25. The vote showed overwhelming support for MIXI, with 95.69% of the votes in favor of the deal, excluding Betr’s votes. However, Betr insists that the final tally was invalid because its proxy vote was not counted.

In response, PointsBet has denied Betr’s claims, explaining that a senior executive from Betr had logged into the virtual meeting and revoked the company’s proxy vote before the voting closed. According to PointsBet, no vote was subsequently cast on Betr’s behalf. According to AFR, the company stressed that the voting process was conducted under the supervision of the independent share registry, Computershare, which confirmed the exclusion of Betr’s vote.

As a result of the vote dispute, Betr has demanded a recount of the votes, threatening to pursue legal action in an effort to block the takeover. Betr’s Chairman, Matthew Tripp, has long sought to take control of PointsBet, offering two separate takeover proposals, both of which have been rejected in favor of MIXI’s all-cash offer. Betr has accused PointsBet of not acting in the best interest of its shareholders and manipulating the voting process to favor MIXI’s proposal.

On the other hand, MIXI has maintained that its all-cash takeover offer provides more certainty to shareholders. The proposal includes a 44.6% premium over the last pre-announcement share price and is considered a better deal than Betr’s competing offer, which is structured as an all-scrip deal. MIXI’s offer, which has already been approved by Australia’s Foreign Investment Review Board, requires a minimum acceptance of 50.1% from PointsBet’s shareholders.

Despite Betr’s objections, MIXI is moving forward with the deal. The company has revised its offer to a fully-funded cash bid, reflecting the AU$1.20-per-share offer, and plans to send a formal Bidder’s Statement to PointsBet shareholders and regulators in the coming weeks.

PointsBet shareholders and the future of the company:

With the shareholder vote in favor of MIXI, PointsBet had initially expected the acquisition to proceed smoothly. However, the controversy surrounding the exclusion of Betr’s proxy vote has added a layer of complexity to the process. Should the legal challenge succeed, it could delay or even derail the takeover, leaving shareholders in a state of uncertainty.

PointsBet has consistently defended its decision to reject Betr’s offer in favor of MIXI’s higher-value proposal. In a statement, the company emphasized that Betr’s offer, based on an all-scrip deal, carried risks related to liquidity and integration. PointsBet’s board argues that MIXI’s all-cash offer provides greater value to shareholders with fewer potential complications.

MIXI has expressed confidence that its amended offer will gain sufficient shareholder approval once the vote is revisited. The Japanese company has also highlighted that the offer is not subject to financing conditions, further bolstering its position as a stable and reliable bidder.

As the battle for PointsBet’s future continues, shareholders must now decide between MIXI’s all-cash proposal and Betr’s competing offer, which remains conditional and carries significant risks. The upcoming court hearing on the matter, scheduled for Thursday, June 26, will likely be a pivotal moment in the ongoing dispute.