Regulatory hurdle emerges for MIXI PointsBet takeover, posed by betr
In a recent turn of events, Betr, a domestic challenger in the Australian wagering sector, has sought interim orders to halt MIXI from processing acceptances under the MIXI offer. This move comes as Betr alleges that MIXI is exploiting the procedural consequences of ongoing Takeovers Panel proceedings to secure control of PointsBet before Betr's offer is considered.
The ongoing dispute between the two companies is creating uncertainty for PointsBet shareholders, who are currently faced with a choice between immediate, lower-risk cash and a riskier, deferred, but potentially higher-value offer from Betr.
MIXI, a significant Japanese investor, made a cash offer for PointsBet on 17th July, initially at A$1.20 per share, which was later increased to A$1.25 on 8th August. The all-cash offer, which is unconditional and offers immediate liquidity, has been recommended by PointsBet's board. However, Betr's scrip-based offer, though conditional and less liquid, proposes a higher long-term value, up to AU$1.35–1.89 per share, but is perceived as risky due to Betr's VIP-heavy and volatile business model.
The board's firm recommendation for MIXI's all-cash bid places pressure on Betr to improve terms or risk losing shareholder support. The timing advantage in filings and regulatory challenges is also adding to the pressure, as shareholders face a trade-off between immediate cash certainty and potentially higher but uncertain value from Betr's offer.
Betr has requested final orders to extend the closing date of the MIXI offer and is compelling PointsBet to release the confidentiality deed it signed with MIXI. The deed's non-disclosure, according to Betr, is inconsistent with the policy of takeovers taking place in a "competitive, efficient and informed market." Betr also requires MIXI to offer withdrawal rights to certain accepting shareholders.
MIXI, in response, has increased its offer for PointsBet to 28.27%. The company has also obtained consent to begin sending its bidder's statement ahead of schedule. As of 8th August, MIXI had increased its holding from 26.15% to 28.27% of PointsBet shares, including those covered by pre-bid agreements.
The current standoff follows months of speculation about PointsBet's future after it attracted multiple suitors. The outcome of this dispute is likely to shape the strategic future of the Australian wagering sector.
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In the heated competition between Betr and MIXI, the gaming sector's investors may find themselves torn between the immediate, financially secure cash offer from MIXI and the potentially higher-valued, yet riskier, scrip-based offer from Betr. This predicament arises from the ongoing dispute over business strategies and policies, with Betr advocating for the importance of transparency and fairness in investing, particularly in response to the non-disclosure agreement with MIXI.
