The Pointsbet Holdings Ltd (ASX: PBH) share price has returned from the Christmas break in fine form.
In morning trade, the sports betting company's shares are up over 10% to $1.49.
Image source: Getty Images
Why is the PointsBet share price jumping?
Investors have been scrambling to buy PointsBet shares on Wednesday after the company confirmed speculation that it could be looking at divesting one of its operations.
PointsBet advised that as part of its ordinary course of business, it routinely explores options to maximise value for shareholders. This includes evaluating proposals from third parties that are received from time to time.
On this occasion, the company has confirmed that it has received a proposal from NTD Pty Limited, which is the owner and operator of rival Betr.
According to the release, PointsBet is currently in discussions with NTD regarding a potential transaction involving the sale of its Australian trading business. However, it notes that any potential transaction will be assessed in the context of PointsBet's global strategy and opportunities.
At the last count, PointsBet had 231,627 active punters in Australia and generated quarterly turnover of $631.4 million and net win of $47.5 million from them during the first quarter of FY 2023.
No details have been provided in respect to how much PointsBet could receive for the business. Though, it is worth noting that Goldman Sachs values the business at 10x EBITDA, which equates to approximately $80 million based on FY 2022's segment EBITDA. So, a premium to this is likely to be expected by the market.
In addition, it notes that the discussions between the two parties are incomplete and preliminary in nature. It also warned that there is no certainty that these discussions will result in any binding transaction.
PointsBet advised that it will keep the market updated in accordance with its continuous disclosure obligations.
