HomeOhio Sports Betting NewsDraftKings Attempts to Outbid Fanatics with $195M Offer for PointsBet

DraftKings Attempts to Outbid Fanatics with $195M Offer for PointsBet

DraftKings has officially put forward a bid of $195 million for PointsBet on Friday, surpassing Fanatics' offer of $150 million by 30 percent.

Image: IMAGO / ZUMA Wire

This bid could disrupt Fanatics’ strategy of leveraging PointsBet’s market access to expand into other states, according to reports. The news of a potential deal between Fanatics and PointsBet caused a sharp decline of over 20 percent in PointsBet’s Australia-based stock in mid-May.

DraftKings’ proposal aims to acquire PointsBet’s sports betting properties in the States, potentially rebranding the PointsBet Sportsbook app as DraftKings Sportsbook in those markets.

Jason Robins, the CEO and co-founder of DraftKings, expressed his confidence in the superior nature of its offer.

“While we continue to focus on operating more efficiently and driving substantial organic revenue growth in the United States, we will also look to prudently capitalize on compelling opportunities at attractive valuations, as is the case with PointsBet’s U.S. business,” said Robins.

He underscored DraftKings’ scale and the ability to generate significant synergies from the acquisition.

DraftKings is a well-established sportsbook platform considered one of the top sports betting sites in most regulated markets. By outbidding Fanatics, DraftKings not only seeks to expand its own presence but also hinders Fanatics’ expansion plans, particularly its ambition to enter the New York sports betting market.

Reports suggested that Fanatics had aimed to launch in New York before the start of the NFL season. Shareholders of PointsBet are scheduled to vote on the Fanatics deal on June 30, and DraftKings’ bid could sway its decision against Fanatics.

“We expect this transaction to increase our Adjusted EBITDA potential in 2025 and beyond and not impact our expectations of achieving positive Adjusted EBITDA in 2024,” said Jason Park, DraftKings’ chief financial officer.

“We are excited about the potential synergies available by acquiring PointsBet’s U.S. business, including offering our customers interesting new bet types and accelerating our roadmap of bringing in-house more of our mobile sports betting technology.”

PointsBet Considers DraftKings Proposal for U.S. Divestment

While PointsBet considers the proposal, it has long sought to divest its U.S. operations. The company will carefully evaluate the offer that promises the most favorable long-term benefits.

The Directors of PointsBet are committed to acting in the best interest of all Shareholders and are considering the DraftKings Proposal alongside its advisers,” said PointsBet in an official statement.

PointsBet plans to consult with its board of directors to determine if the DraftKings Proposal could reasonably lead to a superior offer for the U.S. business.

This process involves a thorough examination of the bid, taking into account specific benefits. It includes the amount and timing of capital that can be returned to shareholders as a result of the transaction.

In addition, PointsBet will examine whether it can execute the DraftKings Proposal in a timely and certain manner. The company will also scrutinize the terms of the DraftKings Proposal to determine if they are more advantageous to shareholders than the FBG Transaction.

Analysts said that the proposal from DraftKings is not a binding offer or a commitment at this stage but serves as a starting point for negotiations. A PointsBet shareholder meeting has been scheduled for June 30, where the vote on the Fanatics offers will take place.

As of now, there has yet to be a definitive agreement between DraftKings, Fanatics, and PointsBet.

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