Betr takes a blocking stake in PointsBet in order to thwart buyout by Japanese rival Mixi

Online bookmaker Betr has acquired an almost 20 per cent stake in rival PointsBet in an attempt to stymie a competing offer by Japanese entertainment giant Mixi.

Betr chairman Matt Tripp

Online bookmaker Betr is trying to stop the takeover of Pointsbet by Japanese entertainment giant Mixi with a rival $360m bid it claims is a better deal.

Betr, chaired by industry veteran Matthew Tripp, now has a 19.9 per cent stake in PointsBet as it positions itself for a formal tilt at the company.

Betr’s offer includes $260m in cash and $100m in shares.

Mr Tripp said the offer represents a “clearly superior proposal” for PointsBet shareholders amid continuing consolidation in the gambling sector.

PointsBet earlier this year accepted a cash offer of $1.06 a share from Mixi, as the e-sports betting and social media operator attempted to get a foothold in Australia through its BetM app. Betr said its offer delivers a potential $1.33 per share to PointsBet investors.

“As the largest shareholder in PointsBet, we now intend to vote our holding against the current Mixi proposal, reducing its likelihood of success,” Mr Tripp said.

“I am confident PointsBet shareholders will recognise the benefits of our proposal as we work towards again becoming leaders in the Australian wagering market.”

Betr will undertake a fully underwritten equity raising of $130m to help fund the deal, of which $20m has been pre-committed by Mr Tripp and others.

“Unsurprisingly, we have been inundated with support for our offer in preference to the Mixi proposal, which sees PointsBet shareholders leave meaningful value on the table,” he said.

“We are confident in progressing our superior proposal and creating the next great challenger brand in this market.”

Tokyo-based Mixi has a broad range of businesses which include mobile games, communication services, and publicly managed sports betting services.

It manages professional sports teams in Japan and has a Northern Territory-licensed sports bookmaking subsidiary which provides wagering services.

Betr is already pushing annualised turnover of $1.2bn while PointsBet is expected to deliver sales of more than $200m this year, bolstered by a push into digital sports gaming.

Betr chief executive Andrew Menz and chairman Matt Tripp.

Betr said analysis conducted by a “big four” accounting adviser had supported the deal, and that the move to a single brand, app, and technology platform was expected to deliver cost synergies of more than $40m.

The company said that having successfully completed the earlier migration of the Betr and TopSport customer bases, it was confident in its ability to migrate PointsBet’s customers and drive improved performance.

Betr earlier this year finalised the buyout of Queensland-based bookmaker TopSport through a $15m capital raising that was five times oversubscribed.

Mr Tripp, a pioneer in Australian sports betting, has been steadily building up his new venture Betr with the aim of securing more than a 10 per cent share of the nation’s online gaming market.

He has sought a tie-up with PointsBet previously, and made a formal approach three years ago. The former boss of BetEasy is a previous partner in CrownBet with casino operator Crown Resorts.

He founded digital wagering business Sportsbet before selling it for nearly $400m. Betr listed on the ASX more than a year ago through the combination with BlueBet – a name it still trades under as a listed entity.

The combination with PointsBet would result in Betr emerging as the fourth-largest digital wagering operator in Australia with more than $1.5bn in annual turnover.

Along with Tabcorp, it would become one of two Australian-owned operators with scale across sports and racing betting.

The takeover tussle comes as consumers have been cutting back on their discretionary spending as they deal with the increased cost of everyday expenses.

At the same time, state governments are seeking to clamp down on gaming with point-of-sale-based taxes. PointsBet earlier this year posted an normalised earnings loss of $3.3m for the December half.

This had narrowed from more than $13m the same time a year earlier.

Betr chief executive Andrew Menz said the buyout transaction provided a clear pathway for the company to become a top-four wagering player, with a 10-15 per cent market share.

“We expect a prize of $40m in annual cost synergies within the first full year of ownership,” Mr Menz said.

“We are well positioned to realise these benefits rapidly, with the bulk of the synergies unlocked through a customer migration to a single brand and app.”

Originally published as Betr takes a blocking stake in PointsBet in order to thwart buyout by Japanese rival Mixi