The PointsBet Holdings Ltd (ASX: PBH) share price was put on ice one minute before the market open this morning.
An ASX lodgement published at 9:59 am reveals PointsBet management is preparing a 'material update' on the proposed takeover by Japanese entertainment company, MIXI Inc (TYO: 2121), via its wholly owned subsidiary MIXI Australia Pty Ltd.
PointsBet will remain in a trading halt until the company makes an announcement or until the start of trading on Thursday.
PointsBet shares closed at $1.09 yesterday.
Let's recap.
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PointsBet share price halted
Two companies are currently engaged in a bidding war for the corporate bookmaker.
MIXI proposed a 100% takeover via a scheme of arrangement in February, offering $1.06 per share, which PointsBet accepted.
At the time, the offer represented a 27.7% premium to PointsBet's closing share price of 83 cents on 25 February.
The deal was a cash offer, with investors set to relinquish their shares in exchange for consideration.
Then the company's biggest shareholder, Betr Entertainment Ltd (ASX: BBT) (formerly BlueBet), offered an alternative.
On 6 March, Betr offered to acquire 100% of PointsBet shares by way of a scheme of arrangement with an illustrative value to PointsBet shareholders of $1.28 per share.
Betr said its offer was superior to MIXI's proposal because it gave shareholders the opportunity to remain invested in a newly expanded Australian-owned wagering operator and benefit from more than $40 million in cost synergies and significant growth potential.
Betr's proposal offered shareholders a 'mix and match' structure allowing them to choose to take all cash, all scrip, or a combination.
On 29 April, Betr upped the ante with a revised proposal involving a "de-risked funding structure" with an implied equity value of $360 million, comprised of $260 million cash and $100 million in Betr scrip.
Betr said the revised proposal delivered a potential value outcome of $1.33 per share for PointsBet investors.
According to Betr:
Given the significant synergy prize in excess of $40 million annually and the opportunity to participate via betr scrip, the Proposal delivers a potential value outcome of $1.33 per share for PointsBet shareholders.
PointsBet said it would assess the proposal whilst remaining committed to the MIXI deal for the time being.
Unsurprisingly, Betr warned it intended to vote against the MIXI deal, arguing that its offer gave PointsBet investors superior value through greater scale, synergy opportunities, and a more compelling growth strategy.
PointsBet has since released the Scheme Booklet on the MIXI deal and set a shareholder vote for next Thursday, 12 June.
On 12 May, PointsBet announced it had determined that the Betr deal was worth exploring further via a mutual due diligence period.
PointsBet commented:
The PointsBet Board, with the assistance of external advisers, has considered the Proposal and determined that it could reasonably be expected to lead to a 'Superior Proposal', relative to the proposed scheme of arrangement between the Company and MIXI Australia Pty Ltd, a wholly-owned subsidiary of MIXI, Inc (the "MIXI Scheme").
Pointsbet therefore proposes that a form of mutual due diligence be undertaken by Pointsbet and Betr.
As is customary, this due diligence will be phased. PointsBet's initial focus will be on the value of synergies and Betr scrip, as the implied value of the Proposal for shareholders is heavily dependent on these two elements given that the Proposal contemplates a 57% cash / 43% scrip funding mix.
We haven't heard any news on the takeover since then.
Today, PointsBet investors are wondering if the impending update does, indeed, involve a superior offer from MIXI.
We'll have to wait and see.
