No cash, all scrip, but somehow Betr? The latest bid for PointsBet is a puzzler

PointsBet chief Sam Swanell. Picture: Stuart McEvoy

Matt Tripp’s desperation to get a deal to add PointsBet customers to Betr’s stable of online gambling products is on full display, as Betr twists itself into loops to compete with Japanese cash.

Japan’s Mixi has offered $1.20 a share in cash for PointsBet, an offer that has the support of the PointsBet board.

The contortions needed to argue that Betr’s all-scrip bid is a better offer would put a Russian ballerina to shame.

First there’s Betr’s claim its offer of 3.81 shares per PointsBet share is worth $1.22. Only if you accept Betr’s argument its scrip is worth 32c. It closed at 30c on Friday.

The 32c comes from the fact that that is the figure at which the company last raised money; those shareholders are now under water and have been for most of the month.

Then there’s the “cash” sweetener on offer – an $80m share buyback, limited to former PointsBet holders but rising to $200m if Betr captures more than 90 per cent of PointsBet stock.

Couple of issues here, perhaps.

Betr chairman Matt Tripp. Picture: Aaron Francis

Not least of them is that a selective buyback will probably require a shareholder vote in order to go ahead, and the people voting on the buyback will be the existing Betr shareholders who have just had their shareholdings diluted to blighty in the takeover.

Asking them to authorise a cash handout to those PointsBet shareholders who want an exit could be a tricky task.

We’re also not sure that the structure of Betr’s offer will be filling shareholders with confidence at the strength of the company’s own outlook. Betr is effectively telling shareholders that they’ve found someone to lend them money, but only if they buy someone else to help strengthen the balance sheet.

We’re sure it will work out fine.

Still, Betr has expressed the utmost confidence in a promise of a $120m lending facility from NAB to back the acquisition.

Isn’t this, though, the same NAB that only a few years ago was boasting of being the first bank to introduce technology to allow customers with a gambling problem to block betting transactions on their accounts and credit cards? Like, for example, sending cash to gambling apps run by companies like PointsBet and Betr.

“We recognise problem gambling remains a major challenge affecting the community, and one that requires organisations, governments and the community to work together to effectively address,” the bank said at the time.

God forbid anyone would suggest there’s a touch of hypocrisy in then lending betting companies money to help consolidate and grow the industry, and presumably flood the airwaves with yet more advertisements touting the joys of sport’s betting.

A&M keeps us hanging

Alvarez and Marsal’s entrance into the Australian consulting market has come with a fair bit of hoopla, fanfare and perhaps a little bit of hostility.

Touting itself as a “disrupter” in the wake of PwC’s well-known troubles in the consulting industry, A&M has mounted an aggressive poaching campaign on senior partners from other firms across the rest of the sector.

It has knocked off 20 of them, to varying degrees of acrimony – EY went to court late last year over the poaching of seven tax partners. But A&M’s “eat what you kill” approach to partner pay has had them rolling through the doors.

A&M was even boasting last month that it had managed to recruit former health minister Greg Hunt to its ranks, although nobody really seems to know quite why.

But competitors keen to keep an eye on how the group’s all-out assault on Australia is travelling have been left hanging by A&M’s somewhat tardy approach to ­financial disclosures.

A&M’s big-name recruit, former federal health minister Greg Hunt. Picture: Brendan Beckett

Its last annual financial results, for 2023, were filed in September last year (showing a $6.3m loss, for the record). Its 2022 results were filed in October 2023. And no ­annual report for 2024, A&M’s big year of expansion, has yet been filed.

Australian companies normally have three to five months to file their annual financial statements with the corporate regulator.

But A&M’s main reporting entity – Alvarez & Marsal Australia and New Zealand Pty Ltd – is wholly owned by Alvarez & Marsal Asia Holdings, registered in the US. It therefore files general purpose financial statements as a subsidiary of a significant global entity.

And they, according to the Australian Taxation Office, have up to two years to file their annual reports. Still, wouldn’t you’d think that a company that boasts it operates with the “highest level of integrity” and is committed to avoiding even the appearance of unethical conduct would be as much interested in the spirit as the letter of the law? Even PwC has managed it this year.

Curious onlookers might have to wait another couple of months for a peek at how A&M is travelling, however.