PointsBet shareholders have approved a plan that will net them up to $295 million following the completion of the acquisition of their US business by Fanatics early next year.
Tuesday’s vote saw PointsBet shareholders vote to distribute proceeds from the sale in two phases. Initial completion is scheduled for mid-September, with subsequent completion expected in March 2024.
Fanatics agreed to buy PointsBet US for $225 million in June, ahead of the sports retail giant’s foray into online gambling.
That price is 50% higher than the original offer of $150 million, after DraftKings submitted a competing offer of $195 million.
PointsBet has a two-step payment plan
Fanatics will pay the Australian-based operator $175 million of that payment in mid-September, according to the statement.
At that time, shareholders are entitled to a capital return of $203 million.
Following the transfer of the remaining $50 million from the sale in March, PointsBet shareholders are entitled to an additional $81 million – $92 million.
“Following the sale of the US business, the financing needs of the company’s remaining assets will be fundamentally different from the status quo,” President Brett Paton said in a statement.
“According to this, PointsBet intends to distribute to shareholders the net proceeds of the sale (after applicable taxes and transaction costs) together with the majority of the company’s corporate cash reserves which will exceed the needs of the remaining business.”, completed Paton.
PointsBet US customers are decreasing
PointsBet accounted for 3.22% of the US sports betting market in 2022, according to reports from the twelve states that report revenue by operator.
This ranks seventh among all operators, with FanDuel and DraftKings accounting for over 68% of the market.
Both the company’s active customers and betting volume have declined so far this year, according to its most recent financial report.
Fanatics expansion falls short of CEO forecasts
In April, Fanatics CEO Michael Rubin backtracked on his comments about being operating in 15-20 states by the start of the NFL betting season, saying 12-15 would be more realistic.
About a month later, Fanatics outbid DraftKings for PointsBet, which has online betting licenses in 14 states.
In mid-August, Fanatics launched its beta testing phase online sports betting platform in four states: Maryland; Massachusetts; Ohio and Tennessee.
Expanding into more states isn’t as simple as just taking over PointsBet’s licenses, however, as regulators in some states have promised “increased scrutiny” regarding new bookmakers resulting from corporate takeovers.
