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PointsBet has finalised the sale of its US division to Jay-Z backed merchandise giant Fanatics Betting and Gaming, subject to regulatory approvals.
The ASX-listed wagerer announced the $US150 million ($225 million) deal on Monday morning. This masthead stated on Sunday that a deal was imminent.
Rapper Jay-Z purchased 25 per cent of Fanatics with other rappers including Meek Mill and Maverick Carter in 2022Credit: AP
Under the terms of the sale, Fanatics Sportsbet will acquire PointsBet’s US operations while PointsBet will retain its Australian and Canadian outfits. The deal means Fanatics will be able to meet its growth targets of operating in 15 US states by 2023. PointsBet operates in 14 states including Michigan and New York and will also give the aspiring wagering group access to PointsBet’s established technology.
Fanatics will also absorb PointsBet’s capital requirements and its two-year advertising deal with NBC Universal, worth $500 million in 2020.
PointsBet shareholders will vote on the proposed transaction at a meeting next month. As reported on Sunday, PointsBet intends to distribute to shareholders the net sale proceeds as well as the majority of its cash reserves. The group’s board estimates this distribution to be approximately $1.07 to $1.10 per share in total. PointsBet shares closed at $1.80 on Friday.
PointsBet has been at the centre of local industry consolidation rumours for the past year, and rejected two takeover attempts from News-Corp’s joint-venture Betr and preliminary interest from other local operators including Entain and Tabcorp.
PointsBet entered into exclusive talks with Betr at the end of last year but the Matt Tripp-led group was unable to secure the $250 million PointsBet was seeking for the deal. PointsBet publicly confirmed it was no longer entertaining talks with Betr in a market update last month.
PointsBet is expected to face additional local acquisition attempts from wagering outfits after the sale of its US division is completed.
Fanatics launched its wagering aspirations with a consortium of star-studded backers including Jay-Z in January. It completed a $US700 million ($1.05 billion) capital raising that valued the company at about $US31 billion last year and has been looking to acquire established wagering businesses to expand its market share.
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