PointsBet on verge of clinching US sale to Fanatics

The move would see PointsBet’s American business sold to a sports merchandising giant, leaving shareholders with its Australian and Canadian betting businesses.

PointsBet could be about to sell its US sports betting business to Fanatics.

PointsBet could clinch a $US150m ($225m) deal to sell its US online wagering business to sports merchandise giant Fanatics as early as this week.

The deal would likely then result in some sort of a cash return for PointsBet, potentially in the form of a special dividend, and would leave the ASX-listed company to focus on its Australian and Canadian operations.

Sources confirmed to The Australian a deal was imminent and could be announced this week, subject to an agreement being struck on the price of PointsBet’s US business.

PointsBet had turnover of about $US820m in the US in the March quarter. It also currently has about $251m in corporate cash on its balance sheet.

PointsBet had appointed Moelis & Co to attempt to accelerate the sale of its US arm, which has been successful in winning market share amid heavy competition in a country where states have been overturning previous bans on online sports wagering.

Several American casino and wagering firms had expressed interest in PointsBet’s operations, which include several sports broadcasting and team sponsorship and marketing deals, but Fanatics has emerged as the most likely suitor in recent days.

Fanatics is best known for selling sports merchandise online – it clinched a 10-year deal with the AFL in March for that league’s official merchandise licence – and its owners have been keen to use its retail reach of 95 million existing customers to break into the lucrative yet competitive US sports gambling market.

It reportedly raised about $US700m from investors late last year for a $US31bn valuation, proceeds from which were set aside for strategic merger and acquisition activity according to the Wall Street Journal.

Fanatics chief executive Michael Rubin told the WSJ in April that the business was planning to invest $US1bn in its new sports betting division.

PointsBet’s potential deal with Fanatics comes as another potential corporate transaction in the Australian wagering industry also moves closer.

Betr, the corporate bookmaker headed by online wagering pioneer Matthew Tripp, has put itself up for sale in a process being run by investment bank Barrenjoey with a potential asking price of $100m.

Barrenjoey has given any potential parties until Monday to lodge bids, though in a slowing market and rising taxes on bookmakers it is unclear whether there will be firm bids.

However, several betting industry executives say Betr could be interested in making a deal to merge with PointsBet’s Australian business.

Betr had previously been unsuccessful trying to raise more than $200m to buy PointsBet’s Australian arm, with talks finally ceasing in late April after The Australian revealed plans for the deal just before Christmas.