PointsBet will return millions to its shareholders following the sale of its US business to Fanatics Betting and Gaming. This was confirmed during the company’s latest extraordinary general meeting.
PointsBet agreed to divest its US assets on June 30, selling its American operations of $225 million. The transaction is intended to take place over a multi-stage completion process and is still subject to regulatory approvals and customary conditions. If the deal is approved, PointsBet will receive $175 million at the initial completion and another $50 million at the subsequent completion.
Following the sale of its US business, PointsBet plans to distribute the net proceeds to its shareholders, along with the majority of the company’s corporate cash reserves. PointsBet explained that the sale of its US assets would change its business, resulting in a surplus of reserves, thus enabling the move.
Following the sale of the US Business, the funding requirements of the Company’s remaining assets will be fundamentally different to the status quo.
According to PointsBet, the first capital return will see around $203.6 million (converted to USD from AUD) returned to the shareholders following the initial completion (expected to be completed by mid-September).
After that, a second capital return of between $80.8 million and $92.4 million will see money returned to the shareholders upon the subsequent completion (around March 2024).
The Deal Between Fanatics and PointsBet Was Mutually-Beneficial
In other news, PointsBet published its FY 2023 results, demonstrating a turnover of AUD 5.74 billion. The company attributed its stellar performance to the divestment of its US assets, which allowed it to focus on other lucrative initiatives.
Fanatics, on the other hand, will now be in the perfect position to challenge some of the mainstays of the US gambling market, including juggernauts such as FanDuel and DraftKings. Analysts believe that the acquisition will help Fanatics capitalize on the upcoming NFL season.
In the meantime, the transaction between PointsBet and Fanatics will also provide the latter company with a unique shot at New York’s gambling market. By acquiring PointsBet’s US business, Fanatics also hopes to secure an entry into one of the most promising US markets.
While regulators agreed that the company’s suitability to hold PointsBet’s NY license must be evaluated, the move is nevertheless a big opportunity for Fanatics to grow its US footprint.