PointsBet Holdings (ASX: PBH) has rejected a takeover offer from BlueBet Holdings (ASX: BBT) worth up to $361 million, thwarting the rival online wagering group’s bid to upend an existing offer already accepted from Japanese mobile gaming group MIXI, Inc.

The Melbourne-based PointsBet argues that the conditional bid from BlueBet, which involves the company raising $100m in debt and a further $160 million in capital, is unlikely to proceed as it has yet to be funded.

BlueBet yesterday announced its indicative offer, priced between $1.02 and $1.09 per share, in an attempt to outbid an existing offer of $1.06 per share from MIXI, Inc. which values the online betting group at $353 million.

The PointsBet board has unanimously backed the cash offer from MIXI and yesterday announced it had entered into a scheme of arrangement which is expected to see the buyout completed by mid-June.

PointsBet CEO Sam Swanell describes the MIXI bid as “compelling” for shareholders to consider.

“The price appropriately reflects the value of PointsBet’s world-class technology assets and reputation for wagering excellence in both Australia and Canada,” says Swanell.

PointsBet has operations in Canada and Australia with a staff of about 300 and generates most of its income from horse and sports betting industry.

The offer price from MIXI is at a 27.7 per cent premium to the company’s closing price on 25 February 2025, the day before the takeover announcement.

While BlueBet only announced its offer to the market yesterday, PointsBet today confirms that it received the indicative proposal from its rival early last week, on 18 February 2025.

“The proposal described a highly conditional cash and scrip offer for PointsBet which BlueBet stated could be valued at between $1.02-$1.09 per PointsBet share,” says the company.

“At the time of receiving the proposal, PointsBet was subject to exclusivity arrangements with MIXI, Inc. in connection with its now announced scheme of arrangement incorporating a fully funded cash price of $1.06 per share for PointsBet shareholders.”

In pleading its case, BlueBet says the merger of the Australian online betting businesses would deliver synergies of at least $40 million a year, presenting “a highly attractive offer for PointsBet shareholders”.

However, PointsBet says the proposal is “unfunded, subject to an explicit financing condition, and would require BlueBet to both raise $100 million in debt and undertake a large upfront capital raising ($160 million), the terms of which were uncertain and could materially affect the value ultimately received by PointsBet shareholders”.

PointsBet also notes that value creation is “heavily dependent on assumed synergies” with BlueBet providing no details of how these savings will be achieved.

Despite PointsBet and BlueBet both posting net losses for the first half of FY25, the companies delivered improved performances compared to a year earlier.

PointsBet yesterday announced a net loss of $17.2 million for the six months to the end of December, down from a $32.6 million deficit in the previous corresponding period, as revenue rose 6 per cent to $124.3 million.

Underlying earnings were also in the red for the December half with an EBITDA loss of $5.9 million down from a $13.6 million loss previously.

However, the Sydney-based BlueBet today revealed a return to underlying profit in the first half of FY25, with EBITDA of $2.03 million up from a $9.23 million loss a year earlier.

Revenue surged 122 per cent to $62.09 million but the company still posted a net loss of $496,000 which is down from a $10.3 million loss previously.

PointsBet shares were trading above the MIXI offer price today, hitting a high of $1.18. The shares pulled back to be level with yesterday’s close at $1.10 by 11.00am (AEDT).

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